One of the flagship features of iOS 4.2 for iPad and iPhone was and arguably still is AirPlay -- the ability to wirelessly beam video to an Apple TV or audio to an Airport Extreme with speakers or other AirPlay-compatible (formerly called AirTunes-compatible) audio gear. And it works great. It really does. Magically even. Like Star Trek. Provided you only want to beam video from the iPod app (Video on iPad and iPod touch) and YouTube app. With any of those apps, you get the AirPlay video option, tap it, and your Apple TV throws the content right up on your big screen. You can even exit the player app and, thanks to iOS 4.x multitasking, the video keeps playing via Apple TV while you surf the web, check email, etc.
Sure, you already have a YouTube app on Apple TV, but if you've found a great video on your iPad, this saves you the time and effort of searching for it again on your Apple TV. You just tap AirPlay and you're sharing. Theoretically everyone in the family could have a video on their iPhone, iPod touch, or iPad and take turns sharing them without having to stop and search for them one after the other on the Apple TV. It's the convenience factor.
But here's the rub -- any other app, even Apple apps like the iTunes Store's streaming video podcasts and YouTube videos played in Safari don't have a video option -- they're audio-only. Same goes for apps like Air Video and even Netflix, which is already built into the Apple TV anyway, just like YouTube.
Same goes with the Photos app. You can show your pictures, no problem, but there's no way to show a video shot with your iPhone and stored in the Camera Roll. There's no AirPlay button available for that and if you try to work around it with the AirPlay widget in the fast app switcher UI, you get audio-only at best and nothing at worst. You actually have to sync home movies off your iPhone, and then sync them back in order for them to work. That's frustrating to say the least. The ability to quickly shoot and wirelessly show off home movies via AirPlay is the killer apps for parents.
Maybe Hollywood is to blame. Apple is uber-careful about not offending the incredibly offensive folks who make the movies and generally treat their own customers as content criminals. That might explain things like locking out the Air Video ap, which can load MKV and AVI files (torrent favorites), but why not iTunes? Why not home movies in the Photos app?
It makes the kind of sense that doesn't, and it turns what should be a terrific new feature in iOS 4.2 into a bit of a tragedy in this first incarnation.
Update: John Gruber thinks Apple might have run out of time, wanting to ship iOS 4.2 in November and not able to finish system-wide AirPlay support. Perhaps, like network AirPrint, the full implementation was scaled back for the release version. If that's the case, hopefully there'll be an iOS 4.3 early next year...