Conclusion and final thoughts
Ready to take the Internet TV plunge? Your best bet is to (1) identify your must-have Internet TV services and (2) buy the gear that supports them.
If we were offering Internet TV recommendations to a friend, the primary one would be subscribe to Netflix. For just $9 a month--the price of two lattes--Netflix gives you unlimited access to thousands of TV shows and movies every month. The service is now supported on nearly every network-enabled home and mobile device. Moreover, that subscription price still includes DVDs by mail, which rounds out your viewing selection nicely.
The second big recommendation would be to look at Blu-ray players and game consoles before you consider standalone boxes. A Blu-ray player can replace an old DVD player for playing all your discs, but it can also deliver a wealth of Internet TV services. Excellent online-enabled Blu-ray players with Wi-Fi are now widely available for less than $180. Netflix-enabled game consoles start at $200.
Netflix is great, and the de facto standard for Internet video (it's now integrated into almost all mainstream Internet-ready devices). But for the best variety of programming, you'll probably want to mix and match video services. Netflix and Hulu Plus is a good baseline for under $20 per month, with a pay-per-view service like Amazon and iTunes used to "fill in the blanks" on TV shows and movies that you won't find on those aforementioned subscription services. (Just remember to create a viewing budget--those per-episode charges add up quickly.)
Speaking of budgets: keep in mind that Internet TV can't yet completely replace regular TV for most viewers. Yes, many of us dream of dumping cable or satellite, and the high monthly bills that go with them. But anyone who's still looking for standard TV fare like live news and sports will find it nearly impossible to go Web-only. (That said, going to a combination of over-the-air TV and Internet TV may be a viable alternative for some.)
Remember, you may already own products that are Internet TV-enabled. If you have a game console or newer Blu-ray player, you may already have access to Internet TV--you only need to configure the devices or sign up for the requisite services.
A DIY Internet TV solution may be as simple as a single-cable connection from your laptop to your TV. If you want to dabble in Internet TV viewing without paying for new hardware, you may only need an HDMI, DVI, or VGA cable to connect your laptop to your TV. (Nearly all HDTVs can double as big-screen PC monitors.)
The last recommendation: Be patient--the Internet TV market is evolving quickly. Some of these services will be added to existing hardware via firmware upgrades. And the prices for network-enabled products continue to fall. If you wait a few months, new services may be available or new content may be offered at better prices.