John P. Falcone/CNET

The Aereo app on Roku boxes just became a much more potent alternative to traditional cable TV.

Aereo -- the Barry Diller-backed online video startup that streams local TV channels to multiple devices for a monthly fee -- had previously been available on Roku boxes, but it required an iPhone or iPad to use as a remote. But the updated app, which went live on Roku earlier this week, allows viewers to use an onscreen navigation with the standard Roku clicker.

Disclosure: CBS, the parent corporation of CNET, is currently in active litigation with Aereo as to the legality of its service. As a result of that conflict of interest, CNET cannot review that service going forward.

That means Aereo subscribers with a Roku box (which retails for $50 to $100, depending on the model) can use it to access several live local over-the-air channels, as well as Aereo's cloud-based DVR (which allows 20 to 40 hours of recorded programming), for $8 per month. There are other payment options as well, including daily and yearly rates.

Roku owners won't find the Aereo app in the Roku Channel Store. It's a "private channel," meaning that it's not approved or reviewed by Roku. Users need to add the channel manually.

Currently, Aereo -- which pulls in local broadcasts from an array of tiny over-the-air antennas, and then streams those channels to its subscribers -- is only available in the New York City area. But the company has announced plans to expand to 22 additional cities in the U.S. later this year.

Aereo has also added its first cable channel to the lineup in the form of Bloomberg TV, the 24-hour financial news network. (Bloomberg is already available for free on the Web and via standalone apps.)

Aereo has raised the hackles of the broadcast networks -- ABC, NBC, Fox, and CBS are all suing the startup -- because it streams their signals without permission. (CNET is a subsidiary of CBS -- see the full disclosure above regarding our updated coverage rules.) Aereo also doesn't pay the per-subscriber retransmission fees that mainstream cable and satellite providers do. Those fees are increasingly important to the broadcasters' profit margins.

John P. Falcone/CNET

Improvements such as the more robust Roku app and the service's expanded geographic footprint put Aereo squarely on the bleeding edge of the growing array of cable TV alternatives. Aereo's twist -- actual live TV -- offers a unique delineation from on-demand services like Netflix and Hulu. Aereo also bests other entrants in the over-the-air TV DVR space, such as Boxee TV and Simple.TV, by getting rid of the need to install an antenna. That's a huge hurdle for many would-be cable-cutters who either don't want to deal with the installation hassle, an unsightly antenna, or spotty reception.

But whether it's the beginning of a revolution or a flash in the pan remains an open question -- one that the courts will need to decide. In the meantime, the latest update addresses many of our major concerns from our initial hands-on.

Editors' note (January 25, 2013, 12:15 p.m. PT): This story was updated to indicate that the Aereo app is a private channel on Roku.