The news comes from the COO of Syabas, the company that makes the Popcorn Hour set-top box. Up until now they'd had a "loose agreement" with the 'Tube: They could stream video from YouTube for free, but YouTube could change the terms of the deal whenever they want. Which they did!:

YouTube has always retained the right to change its terms of service in the future should it ever wish to do so. As a result of Google's decision, Syabas is no longer allowed to access YouTube through its APIs. To be clear, Syabas is not being singled out. With the exception of a few strategic partners Google has chosen to work with, the company has informed Syabas they are asking all over-the-top device makers that are currently connecting to YouTube content through its APIs to take down the service.

To quote every set-top box manufacturer in the world, probably: "shit." YouTube access had become the kind of thing you take for granted in a connected box or Blu-ray player, and it was nice to have. Now, it'll be limited to sanctioned devices like the PS3, Wii, TiVo, officially supported Blu-ray players, etc—backed by the kinds of companies who have the clout to pressure Google, or the money to pay them—leaving everyone else to search for some kind of hacky workaround, the last of which got them in this bind in the first place.

I understand that Google wants to squeeze some ad revenue out of YouTube, and that letting anyone and everyone access raw, ad-free through the backend probably isn't the best business plan, but this isn't Hulu—it's not like they have many powerful content providers to appease, just a bunch of teenagers with webcams. Unauthorized set-top box folks, whoever you are: watch your free video cornucopia dissolve on December 2nd.

UPDATE: YouTube's statement:

Since July of 2008, YouTube's Terms of Service has restricted implementations for televisions based on our APIs. YouTube has been in active discussions with various developers on how best to implement YouTube on set top boxes and TVs. There are several companies, however, that have deployed solutions, like video scraping technology, to circumvent the rules and violate YouTube's Terms of Service. Companies that have negotiated agreements to use our APIs, like TiVo, Sony, Panasonic and Sony's PS3 are not impacted.

So, companies like Syabas have been in violation of YouTube's terms of service for some time now, and knew this was going to happen. The question remains, though: Why haven't they just "complied", and gotten a deal like TiVo or Sony? Does it cost anything? Is YouTube selective? Does it just take a while? [Syabas via Engadget via Lifehacker]

The goal here is simple: Play all the videos that I have ripped from DVD, downloaded from the web, shot with my own cameras or obtained in some other manner, no matter what the format. It sounds simple, but Apple TV can't do it. Neither can the Xbox 360 or PlayStation 3. Video codecs and containers are a nightmare to keep track of, and even more of a nightmare to convert.

This isn't about photos and music. Apple TV is better at both of those than any of this stuff. It's also not about renting movies or buying movies, or even streaming movies from Netflix. Roku has a nice cheap box for that, and Apple TV is suitable if you just want to live inside Steve Jobs' media store. This is about playing non-DRM movies, pure and simple.

The names might be familiar to you: The Popcorn Hour C-200 by Syabas is quickly gaining cult status (and has its own hacker wiki), while the other four smaller boxes come from brands you probably have experience with, including WD, Seagate, Netgear and Patriot. None have built-in wireless, but they all have Ethernet ports.

My two main tests were simple—I loaded PC and Mac formatted external hard drives with a variety of files ranging from H.264 MP4s to WMVs of several vintages, from raw AVCHD files in MTS wrappers to the hot new DivX 7 MKV. Then I browsed through my local network to a NAS that had a cache of similar files. Could I see them? Could I play them? These shouldn't be issues, but they're big issues.

Here's a rundown of each machine, and how they fared in testing:

As you can see, there were clear leaders given my criteria above, but what struck me was how each one differed. Truth is, depending on who you are, any one of these might be the best fit. Here's what really separates them:

WD TV Live - $150

I would have given this thing the solo spot at the top if it weren't for a few dings that might very well be fixed in a firmware update: It won't show you DVD menus on ripped DVD images, and when you play files with the suffix .m4v, it won't fast forward or rewind. Weird bug, and can be fixed if you just change .m4v to .mp4, but since that's the default file naming for Handbrake's "Apple TV" profile, it could be a problem for people, like me, who spent months ripping their entire DVD collection that way.

WD's strengths include a friendly user interface with handy video previews, some promising early online services (including Pandora), and the most reasonable photo and music handling I've seen in this cluster of gadgets.

Seagate FreeAgent Theater+ - $150

I loved this when I tested it a few weeks ago, despite its fugly interface, and it holds up under testing. It does better with ripped .ISO files than WD, doing both DVD menus and chapters (and it doesn't have that weird .m4v bug either). Video was better, especially when running 1080p content. And when it came to browsing my Linksys NAS in search of movies, it could reach more and read more than the WD.

The tradeoff is that the interface is bad, and there's almost nothing in the way of online services. It gets points for making an attempt at sorting music, and displaying photos, but if that's a priority, WD is the better call.

Popcorn Hour C-200 - $300

Hardcore AV nerds love this thing, and I understand why. There are more ways to get at video content than in any other set-top box I've ever seen, and if you really know how to hack, there's really not much it can't do.

It's a big ole thing—they call it a "network tank," and despite remind me of the far cooler ones in Tron, I get it. It has an internal BitTorrent client and you can plug in a Blu-ray drive, for God's sake. I found very few video formats that it wouldn't support (FLV was one) but I had to take major points off because for being so big, it has a lame interface, and it comes with an RF remote that only worked when I stood within 3 feet. They even mention that there might be problems with interference, and that if people experience that, they can buy the IR remote. Great, thanks.

My only question—and, commenters, it's not rhetorical—is why spend $300 on this (plus extra for the optional internal HDD and the IR remote) when you can just buy a home-theater PC?

Patriot Box Office - $130

This was the dark horse of the group, being a late entry by a company known only for computer memory. I was surprised at how well it held up. It actually could decode more tested formats than any other device in this lineup—it did Flash video (FLV), which the three above can't render. Only the WD and the Patriot show you video previews, too. As small as it is, there's a space for a 2.5" SATA drive in there, and even a BitTorrent client. You can copy files to and from different drives and the network, and it's the cheapest of the lot, at $130.

So why did it come in a distant 3rd? Unlike the three above, it can't read Mac formatted hard drives, and its video quality was noticeably the worst of the batch. That said, if you are a hacker sort and want something to play with that doesn't cost as much as Popcorn, set your sights on this.

Netgear Digital Entertainer Live

As you can probably tell by now, Netgear had the most disappointing box of the lineup, despite its Apple TV ripoff of a look and feel. Lack of Mac media support and the inability to read key file formats, like DivX 7 and AVCHD, meant it couldn't pass muster with real video fanatics. Its biggest point of woe was the fact that it didn't support any file over 720p in resolution—whether that's a software thing or a hardware thing, it's sure not future-proof, and probably best to stay away.

I also didn't like the fact that its interface is laid out entirely for retail, like an Apple TV without the panache, or a Roku box that costs more and doesn't do Netflix. Local files were not a priority, and despite the friendly interface, it doesn't even make an attempt to differentiate photos and music. I did give it a gold star for online services, but only because it had the most in this group—if online services are what you love, buy a Roku, or a TiVo, or an Xbox, or a friggin' Apple TV.

Still not sure what you're looking for, check the spec comparisons here:

Update: At the urging of many readers, I recently tested the Asus O!Play and found that it does all of the things the Seagate can do (except fit Seagate-branded FreeAgent drives inside), but at a lower cost—$100 vs $130 in today's pricing. If you have narrowed your options down to the Seagate, skip over to my Asus O!Play review before making your final decision.

The streamer has NFS and Samba support (with only Samba working correctly over Gigabit Ethernet, which is a bummer), and can stream 4GB ISOs "without much delay." Fast forwarding through this didn't cause a problem either, thanks partially to that Gigabit connection no doubt. Music, however, suffers, since there's no ID3 tag reading and no cover art—it's the bare minimum you can get in a networked music player.

What's great about this player is that it's got online content support, meaning you can watch YouTube and Google video. In theory. None of these videos actually played when NAV tested the streamer. That's not so great.

But if you do have a BitTorrent fetish, you can use the Popcorn Hour to download torrents directly onto the machine. Unfortunately, this only lists XviD and not DivX as a supported format, so only a percentage of files you download off BitTorrent will play correctly.

Based on this, it seems that Popcorn Hour A-100 might be good for certain things, but lousy in others. If they can fix the bugs, this could be worth buying. [Networking Audio Video]

It looks like it can handle pretty much everything you throw at it, handling nearly every major codec and network protocol. It's got a bevy of connections, including HDMI out, component out and S/PDIF coax digital audio out (although no gigabit Ethernet and no built-in WiFi is a definite drawback). For a mere $180, it looks like it could be a great AppleTV alternative for people who don't mind their products coming a little cheap and with a few quirks. [Product Page via Boing Boing Gadgets]