“The most obvious new feature of Apple TV is its ability to rent iTunes movies, including a new selection of HD flicks that turned up on the iTunes Store in the last 48 hours. Here’s a look at how Apple’s rental solution prices out against rival services in terms of prolonged cost, as well as a comparison of picture quality of Apple’s HD downloads when viewed side-by-side against other high-def content sources such as HD Cable and Blu-ray,” Prince McLean reports for AppleInsider.

“The encoding quality performed by the studios that submit their content to download services like iTunes can vary greatly. Individual DVDs and Blu-Ray discs can also vary in quality between movies depending how much effort was put into the mastering process. HD cable providers also get varying levels of quality in the content they deliver, but their distribution systems rely so heavily on compression to serve up quantity rather than quality that heavy artifacting and muddy sound are pretty much a given,” McLean reports.

“It seems pretty clear that Apple TV’s HD quality is decent enough to compete against the technically superior HD disc formats and also improves over upconverted DVD. It also offers convenience and price advantages for casual renters that make it a compelling alternative to disc players. Add in the fact that Apple TV does a whole lot more than just rent movies, and it’s clear why Apple invested so much into revising the unit,” McLean reports.

Much more in the full article, including screenshot comparisons and charts, here.