Steve Job’s “and one more thing” led to the announcement of an iPod video player. Finally technology pundits get one right. But if you guess long enough, that will happen.

The video iPod comes with a 2 1/2 inch color display. Compare that with the PSP’s 4.3 inch display and it will be hard to challenge the PSP dominance for portable video. The one thing the video iPod will have going for it is disk space. This is severly lacking on the PSP as Sony’s proprietary memory sticks are expensive (1 gig is $100).

This could also lead to entertainment companies selling TV shows or movies over iTunes. This will also give IPTV developers, such as Revision3, a new avenue for their shows.

So far the announcement has had few details. Hopefully more specs will follow.

I see now Apple has the new iPod on their site.

Witness the evolution of the revolution. First it played songs. Then photos. Then podcasts. Now iPod plays video, changing the way you experience your music and more. Again. In lighter, thinner 30GB and 60GB models starting at $299, the new iPod is music to your eyes.

The new release of iTunes 6 will allow you to sync video with your iPod. And iTunes already has music videos and TV shows, including Lost. The IPTV revolution has begun.

• 2,000+ Music Videos
  Browse new, classic and exclusive music videos on the iTunes Music Store
• TV on iTunes
  Download the latest episode of your favorite ABC and Disney television shows, including “Lost� and “Desperate Housewives.�
• Pixar Shorts
  Buy award-winning Pixar shorts exclusively from iTunes.
• Sync to iPod
  Sync videos to the new iPod and watch them anywhere.
• Give Video
  Buy and send music videos and TV shows as gifts to anyone with an email address.
• Video Playlists
  Organize your videos into playlists, just as you would songs.
• Parental Controls
  Limit kids’ access to videos on the iTunes Music Store.