Engadget has another fantastic scoop regarding the upcoming iOS-based Apple TV. Joshua Topolsky had this to say regarding video playback capabilities of the new box:

Apparently the box won’t be capable of handling (or enabled to handle) 1080i or 1080p video. Instead it will only push out 720p clips. The word — and cause for much internal debate, we’re told — is that this has something to do with the A4’s inability to crank on higher resolution content

The current Apple TV is not capable of playing back 1080p or 1080i content however the rumor that Engadget reported on a few months ago stated that the new set-top box would be capable of 1080p playback. Apparently, that is now off the table.

The folks at Engadget have also heard that the upcoming Apple TV will be getting applications and will be renamed to the Apple TV’s original name, “iTV.”

I’m anxiously awaiting Apple’s iTV announcement, which could happen anytime between now and the end of September.

Interestingly, this release could finally push me to purchase a new television for the bedroom. My current bedroom TV is an old 27-inch CRT that would need to be replaced if I stick with my current plan of retiring my current Apple TV to the bedroom when the iTV is released. If anybody has any suggestions in the 32 to 37-inch range I’d love to hear about them.