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Can the Apple TV models record television shows and movies? Can they play DVDs?
No Apple TV model can record television programs or movies from broadcast, cable, or satellite. No Apple TV model has an optical drive and as a result, they cannot play CDs or DVDs either.
The original Apple TV is designed to wirelessly "stream" iTunes content -- "music, audiobooks, videos, TV shows, and movies" -- from as many as five Macs or PCs to an enhanced-definition or high-definition TV and it can store content as well synchronized from a single computer. On January 15, 2008, Apple also added the ability for users to rent movies directly.
The black 2nd Gen Apple TV and 3rd Gen Apple TV are designed to wirelessly stream content to an HDMI-equipped HDTV from a Mac or PC, iPod touch, iPhone or iPad (running iOS 4.2 or later). It also allows one to pay for select movies, in addition to TV shows, from Apple. It has built-in support for streaming Netflix, YouTube, Flickr and other services, too. It cannot store content directly on the device, although you can store some content on Apple's iCloud service for later retrieval from the Apple TV.
Apple states that the original Apple TV requires an EDTV (Enhanced-Definition Television) or HDTV (High-Definition Television) set with HDMI or component video and audio ports.
The black 2nd Gen Apple TV and 3rd Gen Apple TV models are only compatible with an HDTV with HDMI support. Neither supports component video or audio. Apple formally states that these models are compatible with:
High-definition TVs with HDMI and capable of 720p [for the 2nd Gen or 1080p for the 3rd Gen] 60/50 Hz including popular models from these manufacturers: Hitachi, JVC, LG, Mitsubishi, NEC, Panasonic, Philips, Pioneer, Samsung, Sony, Sharp, Toshiba, Vizio, and Westinghouse.
It is worth noting that some have reported video distortion on older HDTVs when attempting to use the black Apple TV models, so it would be wise to confirm that your particular television is fully compatible prior to purchasing the device.
Officially, no Apple TV models are compatible with SDTV (Standard Definition Television). However, as first discovered by Rouge Amoeba, the original Apple TV does have unadvertised "480i" (SDTV) support that will work at least with some SDTV sets provided that they have component (red, green, and blue) -- not composite (yellow, white, and red) -- inputs and a "simulated widescreen" mode.
Also see: What is the difference between SDTV, EDTV, and HDTV? What is the difference between 480i, 480p, 720p, 1080i, and 1080p?
Apple reports that the internal 40 GB hard drive in the original Apple TV can hold up to 50 hours of movies and TV shows (at H.264 1.5-Mbps video at 640x480 with 128-Kbps audio, 720p maximum), up to 9,000 songs (assuming songs are 4 minutes long and encoded in 128-Kbps AAC), and up to 25,000 "Apple TV viewable photos transferred from iTunes" (JPEG, BMP, GIF, TIFF, and PNG).
Using the same formats, the original Apple TV configured with a 160 GB hard drive holds up to 200 hours of video, up to 36,000 songs, or up to 25,000 photos.
The 2nd Gen Apple TV and 3rd Gen Apple TV have an unreported 8 GB of flash memory to buffer streaming video, and creative hackers may be able to use this for storage, but neither is designed to store any content whatsoever. It is intended to only "stream" content from a Mac or PC (or an iPod touch, iPhone or iPad running iOS 4.2 or later) and allow one to pay for select movies and television shows directly from Apple. However, some content can be stored on Apple's iCloud service for later retrieval from the Apple TV.
Also see: What type of hard drive does the original Apple TV use? How do you upgrade it?