New Apple TV using cloud streaming rather than local downloads?

Continued leaks suggest Apple are giving their Apple TV set-top box more attention, with NewTeeVee claiming to have heard from sources that the Cupertino company is planning to put more emphasis on renting and streaming content rather than downloading it.  Their sources say Apple is negotiating a $0.99 TV episode rental model, which would work in a similar fashion to iTunes movie rentals, while content sales would be stored in a user's cloud space and streamed rather than downloaded to the local device.

That would certainly fit in with previous speculation about a potential hardware re-think for Apple TV, which would move it away from the "mini computer" it is now and more to a plug-and-play streaming peripheral.  Back in May, rumors suggested that the new Apple TV would borrow the iOS operating system and 1GHz A4 processor of the iPhone 4, packed into a compact housing that would rely on remote storage, WiFi b/g/n and minimal connectivity.

Those rumors were followed up by talk of a new custom UI in development, though not – it was said – by the same team previously responsible for the Apple TV.  If all this pans out, it could see Apple take on Netflix and Hulu more directly.