Apple's announcement at Macworld Expo of its new set-top box, the Apple TV, wasn't really unexpected; after all, the company had already given everyone a preview back in September, when it carried the code-name of iTV. But almost four months after we got our first glimpse, we've learned a bit more about the $299 device – due in February – that Apple intends to bridge the gap between your Mac's library of digital content and the sofa in your living room.

What we knew

But first, a recap: Apple TV is a small device (7.7in square and 1.1in high) that's destined for your living room. It attaches to a widescreen digital TV and, optionally, a home theatre sound system. After you've hooked up an Apple TV and turned on on your TV set, you'll see a menu of options that are similar to those you'd find on an iPod or in Apple's Front Row software for the Mac.

In addition to connecting to your TV, the Apple TV connects to your home network, most commonly via 802.11 wireless networking. (The device has an ethernet port on the back as well, if your network is wired rather than wireless.) Once that's done, Apple TV can act as a bridge between your computer – which has a hard drive filled with movies, TV shows, music and photos – and your television.

You control the Apple TV by using an Apple Remote to navigate through an iPod-style interface, browsing a list of music, films, television programmes and photos. The major difference with Apple TV is that you're seeing all of this larger than life on your TV screen instead of a tiny iPod display. Apple TV also gives you access to iTunes movie trailers and 30-second previews of popular iTunes songs.

And just as Apple said back in September, to use the Apple TV you'll need a widescreen TV with digital or component inputs. It doesn't have to be an HDTV (high-definition TV) set, but it does need to be at least an 'enhanced definition' display (capable of displaying at 480p, or 480 lines of progressive-scan resolution).

What we learned

Beyond its new name – remember, even back in September, Apple was stressing that iTV was just a code name – the biggest piece of new information we received about the Apple TV involves storage space. We now know there's a 40GB hard drive inside the device. Back in September, we speculated that the Apple TV might only have a small amount of storage space and would be forced to stream all audio and video data over its network connection; the included hard drive changes things considerably.

You load data onto the Apple TV's hard drive by synchronising it with a computer (Mac or PC) running iTunes. An Apple TV on your local network will appear in your iTunes source list, very much like an iPod does now when it's connected. Click on the Apple TV icon, and you'll be able to configure synchronisation features – again, just like the iPod. iTunes then automatically copies movies, TV shows, music, photos, and other data onto the Apple TV via your home network. (Apple estimates that the hard drive is big enough to hold about 50 hours of movies and TV shows, or 9,000 songs, or 25,000 pictures.)

If you've got more than one computer in your house, don't worry – while Apple TV will connect up with only one copy of iTunes to store data on its hard drive, it can connect to up to five other computers and stream data from them (including movies, TV shows, and music). The only difference is that it won't store information from those computers on its hard drive – it just plays them and forgets them. (And Apple TV can't connect to iTunes libraries without explicit permission – as Apple TV tries to connect, it displays a PIN on the TV screen; you've got to type that code into iTunes before it will allow Apple TV to connect.)

Apple's Macworld Expo announcement of Apple TV also gave us greater details about exactly what video formats the little box will play. Unsurprisingly, it's very much like the same sort of video that the iPod plays: H.264 and Mpeg4 videos with dimensions up to 640x480 pixels (the very dimensions of all the videos in the iTunes Store). But it'll also play HD content at 1,280x720 pixels, or 720p in HDTV terminology. (Apple TV supports both 720p and 1,080i HDTVs, but can't play videos at 1,080i resolution.)

Other things we've learned include the fact that Apple TV is powered by an (unspecified) Intel processor, and supports 802.11 wireless networking including support for the ultra-fast draft 802.11n specification.

What we don't know

Although Apple TV is coming into focus, we've still got a lot of questions. Perhaps the biggest one is this: at a time when internet video services such as YouTube have become massively popular, is it possible that Apple could release an internet-connected TV product that didn't have the ability to browse YouTube and similar services? Apple's never demonstrated such a capability, although it has shown off Apple TV's ability to browse and view movie trailers streamed from, and presumably browsing a site such as YouTube would work similarly.

Then there are questions about file formats. The internet is littered with video content that doesn't appear in tidy Mpeg4 bundles. In addition to YouTube, there are files encoded with DivX, Xvid, WMA, Mpeg2, and other codecs; and live video streams in Windows Media and Real formats. If Apple TV doesn't support many (or any) of these formats, it will be unable to play a huge chunk of the video content available out on the net.

This is not to say that intrepid programmers won't find ways to transfer, convert, and transcode video into Apple TV-friendly formats – but even the most elegant workaround is still not quite as good as built-in It-Just-Works simplicity.

The good news is, even if Apple TV doesn't have the ability to view such videos right now, that doesn't mean that it couldn't add those abilities later. Under Apple TV's Extras menu is a prominent Update Software command – suggesting quite clearly that Apple TV is a young dog that can be taught numerous new tricks. What tricks those are is up to Apple.

There's one final mystery about Apple TV: among the video and networking ports is a single USB port. Apple hasn't said a word about what that USB connector is for. Maybe it will allow you to add external storage via a USB hard drive, or to directly connect your iPod, or maybe even add on an HD-DVD player. Or maybe it'll be good for nothing. Until February, when we all get our hands on the first Apple TV models, all we can do is guess.