In addition to highlighting its line of overhauled iPods earlier today, Apple also debuted its much improved (or at least significantly smaller) Apple TV device, which not only lets you stream iTunes video and music through your TV, but also Netflix’s Watch Instantly library of shows and movies.

The AppleTV Steve Jobs showed off this morning was only a quarter of the size of the existing model. Also cut drastically is the device’s price. The old AppleTV retailed for $299, but — realizing there’s more money to be made if people actually buy your product — Apple will be selling the new-fangled box for $99.

Additionally, owners with Netflix subscriptions will be able to stream movies and shows from the subscription service directly through the AppleTV, which has a full HDMI out connection in the back (as opposed to the Mac Mini and other Apple devices that usually require a dongle of some sort to bridge the connection).

Jobs also announced that shows from ABC and Fox will now be available as $.99 rentals, down from the $2.99 that users have been charged in the past.

The new AppleTV will go on sale in about four weeks, said Jobs.

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