Apple has released its promised free Apple TV 2.0 software update, which owners of the device can install now.

The update is primarily focused on offering support for film rental services which are now available through iTunes. Once the software is installed, Apple TV owners can browse, preview, rent, download and view rented films directly using the Apple TV, no computer is required. This service is expected to launch in the UK later this year.

While the exact size of the update isn't known, downloading and installing the software takes around 20-25 minutes on a fast broadband connection.

The update brings a redesigned interface, and offers support for browsing and purchasing music and podcasts directly from iTunes. Apple TV can also now play HD video content (rented films and video podcasts).

Apple TV 2.0 gains a new introductory video in which a moving blob of videos are transmitted in a beam of light into an Apple TV device.

The Apple TV also gains AirTunes facility, in that it can now be used as a device to stream music from a computer in the same way as an AirPort Express. Open iTunes on a computer that the Apple TV is using as a source item and you'll see a new option in the speaker menu at the bottom right corner of the iTunes browser naming your Apple TV as an output option.

Apple TV can also browse image collections held on Flickr and .Mac. Users can now set the Screen Saver to stream photos from any of their Flickr contacts or .Mac Web Galleries rather than being confined to using photos synchronized from iTunes.

Apple has reduced the cost of the Apple TV in the US. Sadly, the product's UK price appears unchanged at time of writing. The software will be pre-installed on all future units sold.