http://forum.handbrake.fr/viewtopic.php?f=7&t=18102 From the Handbrake Forum: So the old Apple TV would play 720p but would struggle if the bitrates and frame rates were too high (although it could handle higher than Apple's stated specs) and couldn't play any 1080p at all. The new one appears to handle any 720p video you can throw at it as well as 1080p up to a certain limit. So once again, Apple appears to be very conservative in its stated specs. This is excellent news for all those who want to keep their content in 1080p. I'm sticking with 720p as the storage/convenience/quality ratios work out better for me. The only 1080p I plan to use is Blu Ray discs until internet speeds, storage, and processor speeds improve drastically. I tried editing some 1080p video once and it was a pain in the butt on a Core 2 Duo processor and storing it would have required paying twice as much in hard drives. Still, I wonder what the 1080p limit is compared to the limit for other comparably priced boxes which claim to handle 1080p? Because as we all know, claiming to be able to handle 1080p and handling it well are two completely different things.