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it's the set-top box that is doing the work of actually presenting the user interface and the MPEG decoding.
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I thought that would be the case, but how many of Sky's boxes have an ethernet port to allow the router to be connected to it? I have one of the latest Plus boxes and there is no way I can see a way to connect a router to it. I suppose it would be possible to connect through a PC, but that would defeat the object. To me this means that before you could use the set top to receive on demand video through the router, the boxes would have to be upgraded. This to me seems to be a bigger stumbling block than the type of router used, the cost of replacing millions of Plus boxes would be phenomenal.
I helped a friend set up his BT Total at the weekend, he has it on a 30 day trial. Unlike the Sky boxes, the BT box is fully enabled for internet connection with ethernet ports for connection to the router. On the whole it looks a far superior box to the Sky Plus. I don't know if it is standard issue, but he was even supplied with Powerline network adapters, which allows him to keep the router downstairs and have his Box/TV upstairs. BT appear to have beaten Sky to the punch with this aspect of Video on demand over internet.
To be honest, I am a bit confused about why Sky even want to bother with the idea, they have a perfectly good delivery system with the satellite. But maybe I am not looking far enough ahead.