With so much rumor and speculation of an upcoming video gadget, and Apple’s continued denials, Apple Computer finally introduced on Wednesday the natural evolution of its music player-turned-photo-device, the Video iPod.

The latest incarnation of the iPod, slated for availability next week, sports a 2.5-inch colored screen, much to the contradictory statements of Apple CEO and co-founder Steve Jobs that nobody wants to view movies on a tiny screen, and starts at $299 for a 30GB version-- able to hold about 7,500 songs, 25,000 photos or 75 hours of video-- and $399 for a model with twice the capacity.

Expect the copycats to be losing sleep trying to reach market as fast as they could. Meanwhile, owners of those photo iPods must be feeling cheated, but the rest of the world is rejoicing. The porn industry probably rejoicing most of all.