The long-rumored iTunes rental service is finally up and running. For many users, the most attractive part of the service (and certainly the only part that really sets it apart from any of the other online rental options) is the ability to transfer your rental to an iPod, iPhone/iPod Touch, or third-generation Nano for playback on the go. Actually, let me rephrase that: your iPod Classic, iPhone/iPod Touch or third-generation Nano. That's right boys and girls -- if you are one of the millions who have 5 and 5.5G iPods with video, no iTunes rentals for you. I suppose that's one way to get people to upgrade.

There was an explosion of applause during yesterday's keynote when Steve Jobs announced rental compatibility with every iPod. Something tells me that if it had been understood that it only included every current generation iPod, the response might have been more akin to the boos that erupted when it was announced that the iPod Touch software update is $20. Update: Evidently, Steve did say "current generation iPods" - in any event, it was not made clear that 5/5.5G iPods would not be compatible. I mean, I for one was not expecting the message below when trying to test out this whole Rentals scheme:

So, why are previous generation iPods incompatible with iTunes Rentals? Pure speculation leads me to believe that the whole authentication-chip for TV-out "update" to the Classic is at the root of the incompatibility. I guess it would just be too much of a risk for Apple (and the movie studios) to allow 5G customers connect their iPods to a TV via an open TV-out cable so that the SD content could then be captured using the analog hole. Because really, circumventing the iPod rental system using TV-out is how people really want to pirate digital media. Not through BitTorrent or breaking the actual iTunes copy protection. No, individuals are going to capture the analog signal from the TV out on their iPod and then convert that back into digital, all for sub-DVD quality movies. Makes perfect sense. (Not.)

Well, at least I now have an actual reason to look at buying an iPod Classic aside from capacity. Still, this and the lack of Front Row rental access is not really doing the best job of convincing me that iTunes rentals have a place in my digital life.

Update: As some of the comments have pointed out, the reports about the iPod Classic's only working with certified Apple TV-out cables might be untrue. I don't have an iPod Classic so I can't verify it one way or another. Again, that was just pure speculation on my part for some logical reason for 5/5.5 G incompatibility. Update 2: After looking at iLounge's dissection of the AV cable, I feel confident that an authentication chip is infact required for the new models. If this is related to the iTunes rentals remains unknown.

Other comments have raised the question of the quality of the rentals being too high for the 5G iPod. This I can unequivocally state is NOT true. As a test, I went ahead and bought "Chuck & Buck" from iTMS. Not only was the file size identical (1.06 GB), iTunes itself saw no difference between buying the movie and renting it. I was able to transfer the newly purchased copy of the film to my iPod with absolutely no problem. This is NOT a matter of hardware not being capable, it is a decision for whatever reason, not to update the software on older generation devices to work with the new rental system.