Steve Jobs’s Apple TV hobby, the box that brings iTunes content into the living room, is getting ready for its third revision. What will the company do to leverage the recent spurt of interest in the device and boost sales even further? Here’s what the company will and won’t do to push Apple TV.

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Netflix (NFLX) today unveiled a new set-top box to be produced by privately held Roku Inc. that will allow subscribers to stream an unlimited number of movies and television shows directly to televisions. The device costs $99. The video content is free to anyone with a Netflix subscription of $8.99 a month or more. Most of the video content will consist of older material, rather than new releases.

The obvious comparison here is with Apple’s (AAPL) Apple TV box, which costs more, requires paying for movies downloaded from iTunes, but also offers more functionality, like the ability to stream personal music and photo content to your television. Older movies for free? Newer movies for a fee? It’s an interesting choice.

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Twentieth Century Fox actually has two deals with Apple that Steve Jobs announced today with Fox Filmed Entertainment CEO Jim Gianopulos. A lot is being made of the video rentals, more on that in a bit. But we’ll start with a look at the DVD-download combo; the Apple version is only available for now with Fox. Fox first tried it with Windows on “Live Free or Die Hard.” Buyers get a digital version on the second disk of special editions; it can be uploaded to a computer and moved to portable devices. In iTunes’ case, the digital copy file goes straight to iTunes and can be used with only one iTunes library; it can be used on a PC or Mac, video iPods, iPhone or Apple TV.

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