Today Apple updated the complete line of regular iPods to color screens and also added pod-casting features to iTunes. Video is next. Never mind what Steve Jobs says, he was blowing smoke when he said they weren’t interested in video for the iPod.

Here me now, video will come to iTunes in version 5.0 and the iPod will do video, trailers, video blogs and lookout BlockBuster and NetFlix - video rentals too - screw US Postal mail - you’ll get it from iTunes/iVideo or whatever. Do you doubt? Are you crazy? Consider these points and then tell me I am wrong.

1) All iPods now have color screens
2) Quicktime 7 and H.264
3) Apple’s DRM is the best out there and has won the hearts of the music industry - video is the natural next step
4) Mass online delivery of paid video content is not a matter of if but when and who
5) Apple quicktime trailers in iTunes were the first step towards iPod video
6) iPods have firewire
7) Cell phone makers are already doing it

The point is, all of the pieces are in place. Apple is the pioneer of digital video authoring and you’d be crazy to think they would just ignore putting video on the iPod. It’ll come through iTunes, of course and you’ll be able to get both free and paid content.

One thing I want say is that I don’t think you’ll see people watching movies on their iPods. Maybe trailers and shorts while they commute or whatever but the iPod for long format content will be more like a mobile DVD player. The DRM (Digital Rights Management) that is built into iTunes could, conceivably, allow you to download a couple movies and keep them for say 5 viewings. Then since you don’t have anything to return you could watch that rental say once the first week you get it, then again next month and 3 more times the rest of the year at which time your usage license would expire. It already happens. Every song you purchase from iTunes is tracked by Apple’s databases so that no more than 5 computers are using it and also iTunes keeps track of how many times you burn a CD of a certain playlist with iTunes purchased music.

So while not exactly the same thing, it is very feasible that Apple could deliver video content to iTunes users who would then load it to their iPod (or not) and then go over to their friends to watch a movie or on their commute to work or on the plane. The iPod will keep track of how many times the movie has been played and will “extinguish” or “refresh” (aka more $) the file when it has reached its max plays. It will be video on the go and with truly no late fees.