According to information leaked to
AppleInsider, the next Apple iPod is due sometime this year with
added video capabilities.
"When a user connects one end of the video-cable into the iPod's new dock connector and the other end into the TV, it will switch the iPod into video mode," the source said, which then allows the user to display video clips located in the iPod's 'movies' directory.
In other words, the iPod v4.0 is not a movie player by itself, but a remote harddrive with playback capabilities to an external video source.