Apple Computer Inc. said Tuesday its iTunes online music store would begin selling movies from Walt Disney Co.'s Disney, Pixar, Touchstone and Miramax divisions as the iconic company makes it most aggressive move yet into the digital home.

At the event Apple also unveiled a number of new iPods, including one with the most capacity to date, and said new versions of the popular digital music players would sport video games such as Pac-Man and Tetris.

Apple Chief Executive Steve Jobs said a new 80 gigabyte iPod would cost $349. The company also introduced a new, thinner iPod Nano available in five colors with 24 hours' battery life and a 1 gigabyte iPod Shuffle.

Jobs also said the company plans to ship a device in the first quarter 2007 that will allow consumers to stream movies, music, photos, podcasts and television shows to their home entertainment systems. The device, code-named iTV, will cost $299.

Speaking at a event in San Francisco, Jobs said newly-released movies would cost $12.99 if pre-ordered or bought during the first week available. Library titles would cost $9.99, Jobs said at the event, where the company also introduced new versions of its iPod digital music devices.

He said there are about 75 films now available for purchase on iTunes and they would take about 30 minutes each to download for those using a high-speed Internet connection.

"In less than one year we've grown from offering just five TV shows to offering over 220 TV shows, and we hope to do the same with movies" Jobs said. "iTunes is selling over 1 million videos a week, and we hope to match that with movies in less than a year."

View: Official Apple iPod Web Site

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News source: CNN

Let me also add the following:

-Apple has introduced the capability to play games on 5G iPods ONLY. You have to pay for them via the iTunes Music Store for $4.99 each.

-Apple has also announced a set top box for you living room called iTV (as of now). It will be released in Q1 of 2007.

-Apple has updated the iPod's Software for most newer models. A HUGE preformance increase is noticable on the 5G iPod with the new 1.2 Firmware. Video playback is almost instant, you can seek in a video as fast as you can seek with music, the menu system has had a big speed boost, and the annoying pause the 5G would make when changing songs no longer exists. Hitting next on the clickwheel instantly goes to the next song without having to wait for the HDD to spin up (Gapless Playback).

Also...

theyve included a feature ive been dreaming about for a year now!

LCD brightness control!

Ok what gives. Itunes 7 just plain sucks. This can't be the "final" release as it has so many bugs!
Dead shortcut links.
Random crashes
Sound quality issues...

Also a thinner ipod nano.... How about give us something thats been requested, like atleast a 20gb ipod nano, as i mean comeone if others can do it then why can't apple. Also even thinner.. Why?!?!?! I cans ee it now Oh noes myipod nano has scratches on it.... I wonder they fixed the quality control issues in these?

tempted to click the buy button...

I installed Itunes 7 last night. Today I'll get to test it out.

The sync ipod to computer feature blows. It's only for pre-paid music. But I give it a week before thats hacked

sync? i thought that was their new equivalent of Update, as in copy my library to my ipod

Nah, they have an Ipod sync feature which will copy Apple Purchased music from an ipod to a computer. It won't work on any 'ripped' Mp3s.