The original Apple TV was nearly a debacle for Apple—“nearly” only in that the hot-running and terminally buggy device laid the foundation for a cool-running and less finicky successor, late September’s second-generation Apple TV. After an initial flurry of hype, Apple quickly downplayed the original model as a mere “hobby,” so the expectations weren’t as high for the sequel. It lowered those expectations again by explaining that a key software feature, AirPlay media streaming from iOS devices, wouldn’t be available until a month or two after the device launched. So our review judged the new Apple TV for what it actually was when released, and we briefly updated it last month to reflect the improvements wrought by its confusingly-named 4.1 software update.

In short, AirPlay streaming support from iOS 4.2 devices to the Apple TV was off to a good start—even with its present limitations. There’s no doubt in our minds that Apple TV became markedly better with the addition of AirPlay, as videos that once took forever to sync to an Apple TV hard drive could start playing almost instantly from whatever device you happened to be carrying them on at the time, and the music and photos on your portable device could be played through the TV, too. That AirPlay allowed for multitasking on the currently streaming iPhone, iPad, or iPod touch was even better. Apple is being rewarded for the Apple TV 4.1/iOS 4.2 synergy: we’ve seen real evidence of improved interest and sales for the new model since AirPlay was added. Friends, family members, and readers who shrugged off the first model at any price have put the new version on their wish lists, and because of the $99 price, it’s much easier to buy and give as a gift than before. We’ve gifted several already, ourselves.

The interesting thing is that AirPlay and pricing are only half of the story as to why the new Apple TV is winning over consumers. Netflix is the other major part. Six months ago, Netflix’s steaming video offerings were third- or fourth-tier in quality, but they’ve continued to improve at an impressive rate. As of last month, the collection of TV shows, movies, and documentaries had actually become impressive enough to help some people (including one of iLounge’s editors) cut their cable TV subscriptions—a conceptual tipping point, we think—and Netflix’s streaming-only monthly rate has dropped a little lower in the United States, as well. Apple TV is far from the only device streaming Netflix content, but its Netflix interface is one of the best on a TV-tethered device, and its secondary library has overshadowed the primary catalog offered by Apple. Hulu Plus would just be gravy at this point. Other apps would be phenomenal.

Apple’s original Apple TV won over only one of our editors (Jesse) and mostly collected dust with everyone else. We universally respect and use the new model. At least one of us already has three new Apple TVs, which no longer seems as crazy as it would have been a year ago, and we’re actually excited to see what additional features Apple will add this year. This is a rare opportunity for Apple to resuscitate a damaged product line—hopefully it will make the most of the second chance it’s being given by everyone, rather than falling back to “hobby” status after the holiday rush. Our guess is that the sales numbers will justify Apple’s increased attention.