The C-200 is a bit bulky — it’s slightly bigger than your average DVD player — but it packs in plenty of features. It connects to your home network via Ethernet (a wireless adapter is in the works, but wasn’t ready in time for me to test), and can play back audio, video and photos stored on your home network. You also can transfer content to the device itself; it has a 3.5-inch tray for mounting an internal hard drive, DVD drive, or Blu-ray drive and, inside the box, an internal mount for a 2.5-inch laptop hard drive. You also get four USB ports that can be used to connect external storage devices. In addition, the C-200 can connect to a few online sources for content.

Setup is relatively easy, though you’ll need a long Ethernet cord or a set of power line networking adapters if you’re looking to put the Popcorn Hour box in a room that doesn’t house your router. The C-200 connects to your TV via HDMI, S-Video, Composite A/V or Component A/V.

The C-200′s on-screen menu is the first sign that the device is lacking in the finer details; it’s not the prettiest thing you’ve ever seen. You get basic icons for each of the device’s functions (like USB storage, network connectivity, and so on) and you can cycle through them easily with the included remote. But the purpose of each icon isn’t immediately apparent — after a few weeks testing the box, I’m still confusing the icons for the media service portal (where you can access the limited web-based content) and the icon for the network browser. The interface also suffers from a disappointingly bland blue-and-white color scheme, but that seems to have been fixed, somewhat, in the latest firmware update, which adds yellow and black to the mix.

I did not have an internal hard drive or DVD drive to install in my review unit, but the process looks remarkably simple. There’s a door on the front of the C-200 that you can open, and it looks like the drive will simply slide right in. I was able to attach various USB-based storage devices to the C-200, though, and I was awed by the video quality on playback.

The C-200 offers the best video quality of any set-top box I’ve tested, bar none. Video looked incredibly sharp, and I saw no formatting issues, something that often plagues these kind of devices. The C-200 can handle files up to 1080p, and plays back just about any video file format you can find. It didn’t balk at anything I threw at it. (You can see a full list of supported file formats on Popcorn Hour’s site.)

So, what’s not to like? Well, accessing content that’s stored on your network sure could be easier. Syabas (the company behind Popcorn Hour) offers an application called myiHome that’s supposed to turn your PC into something of a network server for the C-200. But, as Syabas tech support admits, it can be hit or miss as to whether the C-200 will find the server. They recommended setting up a network share instead, which is a pretty tedious process, made more so by the fact that you have to use the remote’s numeric buttons to enter all the information. It’s like composing the world’s most annoying text message.

Once you can access your networked content, though, video quality is surprisingly good. Aside from some buffering when I launched files, I saw almost no difference between video streamed over my network and that stored locally on the C-200.

Accessing online content isn’t a strength for the C-200. You can’t use it to access content from YouTube, as Syabas had to remove access to the service because YouTube says it was in violation of its terms of service. The company says it hopes to restore YouTube access soon. You also can’t access sites like Hulu or Netflix directly from the box, though Syabas says it may work if you have the PlayOn digital media server app running on your computer. But PlayOn costs $39.99 after a two-week free trial.

That you have to purchase an extra app to get access to the most popular online video sources highlights one of the C-200′s biggest flaws: Everything costs extra. (The other big flaw? That user interface.) The box alone costs $299 — and all you’re getting is the box. You have to add your own hard drive, DVD or Blu-ray drive, or external USB-based storage. By the time you’re done, you could have spent $500 or much more. You’ll have a complete home entertainment center with superb video quality, though.

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Roku HD-XR

With the proliferation of new broadband-connected TV sets and Blu-ray players ready to take the world by storm, the demand for standalone Internet set-top boxes will be limited. That’s one takeaway from new research released today by The Diffusion Group, which estimates that Internet set-top boxes like the Roku Player, the upcoming Boxee Box, and the Popcorn Hour devices will account for just a fraction of all broadband-connected consumer electronics sold.

That’s not to say that the market will be nonexistent. By 2014, there will be about 30 million standalone Internet set-top boxes sold worldwide, said TDG senior partner Colin Dixon. But that 30 million represents just 3 percent of all broadband-enabled consumer electronics devices that consumers will buy in the next five years.

So where’s the growth in connected devices going to come from? Over the next five years, Dixon believes, Blu-ray players and gaming consoles will be big sellers. “Blu-ray will probably outsell Internet set-top boxes by about 10-1,” Dixon said in an interview with NewTeeVee. “I don’t see Hollywood moving away from packaged media anytime soon.”

Perhaps more importantly, Dixon said Blu-ray players are moving away from being just a device for viewing optical media, and becoming broadband media devices themselves, with consumer electronics companies such as LG, Samsung, and Sony adding services like Netflix and Amazon.com’s video-on-demand service to their Blu-ray players. Over the next few years, the addition of broadband video services to Blu-ray players, coupled with lower prices, should make the devices a good value for consumers, compared with broadband-enabled TVs, which are still relatively big-ticket items.

While Internet set-tops will have limited growth over the next five years, they’re not the only standalone devices that will be eclipsed by consumer electronics that have multiple capabilities. Due to the existence of new standards like UPnP and DLNA that exist in multiple consumer electronics devices, TDG estimates that digital media adaptors, which sought to bring content stored on user PCs and other devices to their TVs, will become virtually nonexistent by 2014.

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