Apple held a special event today to introduce an updated iPod lineup and a new version of iTunes.

The introductions were evolutionary updates to existing products instead of revolutionary ones. The iPod shuffle is now smaller, but still not edible; Apple iTunes 7 adds movie downloads; Apple has a deal with the NFL to deliver football video downloads; and the updated iPod has a bigger hard drive and lets you play 80’s video games.

The widely-anticipated iPod phone was nowhere to be seen, and the iPod update failed to deliver a larger widescreen display or the touch screen that some had predicted.

For many music fans, the best news of the day was that, after 5 years, iPods will finally be able to play albums back without gaps in the playback.

The day’s most important announcement was the Apple iTV, a set-top box designed to marry Internet video with big screen TVs.

The iTV has the same basic format as a Mac mini, except it is a little shorter. The device will have a built-in power supply, audio and video outputs, Ethernet, USB 2.0 and wireless support.

The iTV will come with the same remote as current Macs, along with a new version of Front Row sortware. Users will be able to purchase movies via the iTunes music store and then watch them on a big screen with the iTV player.

The prices is expected to be about $300, and the iTV should ship Q1 2007.

The iTV is not a digital media center, but a peripheral that makes it easy to get Internet content to your TV. For fans of video podcasts and other Internet video, the iTV could be a killer accessory. For music fans, it’s three times the cost of the an Airport, and half the cost of a Mac mini.