Video on the iPod, how big is Apple thinking?

I really didn't think that Apple would release an iPod with video capabilities. Steve Jobs kept saying that video on a 2 inch screen is not what consumers want. I agreed with him. Although the idea of being able download the shows you missed is super cool, I really don't think people are clamoring to watch last night's episode of Desperate Housewives on a tiny screen.

What's worse is that the new vPod doesn't support even standard definition television, the resolution is slightly smaller. A video iPod would be an incredible product if it had an output that could connect to the RCA inputs on your TV the same way that your game system does.

I'd love to see Apple upgrade the video capabilities and release a Dock that you could plug into your TV. The iPod itself could become your Tivo pretty easily actually... maybe this new video playing iPod is the first step in a very big transformation.