9:46 PT - JS: Hi everyone. I'm Macworld Editorial Director Jason Snell, and I'm here with Macworld Associate Editor Dan Moren. Together we'll be liveblogging the event from the Yerba Buena Center in San Francisco, just next to the Moscone Center. Also here for Macworld are Senior Editors Dan Frakes and Chris Breen. Stay tuned for live coverage and photos of the event, as it happens.

9:48 PT - DM: As promised, we are indeed "rocking out", right now to Credence Clearwater Revival—Fortunate Son, for the curious—and other classic rock tunes.

9:49 PT - JS: As we entered, they were playing "Sunshine of Your Love" by Cream. I can't hear that one without imagining Ray Liotta scanning the skies for police helicopters. But maybe that's just me.

9:50 PT - DM: Now we're onto the Stones, "Gimme Shelter." Maybe someone's just playing Rock Band backstage.

10:00 PT - DM: The lights are going down, so we're about ready to go here. And...silence. And Steve Jobs hits the stage. Unsurprisingly, it's the standard black turtleneck and jeans.

10:00 PT - DM: "We've got some really exciting stuff to share with you." before we do, "The reports of my death are greatly exaggerated." That gets a nice laugh and a round of applause. "Enough said." The real topic of this morning is music.

10:01 PT - DM: We'll start with iTunes. Now over 8.5 million songs. Started off with just 200,000. Over 125,000 podcasts. Over 35,000 TV shows, 2,600 Hollywood movies. Over 3,000 apps for iPhone/iPod touch.

10:02 PT - JS: What an excellent way to start. Bat down any rumors and questions without actually revealing any personal information. Just address it and move on. I'm sure some people won't like it, but it's a very Apple thing to do and I'm glad that Jobs addressed it, however briefly.

10:02 PT - DM: Over 65,000,000 accounts in iTunes. That's a whole lot of credit cards. They've climbed to the top of the music distributor chain, in any format. Topping Walmart, Best Buy, Amazon, and Target.

10:03 PT - DM: Adding new content. HD television shows are the first thing. You can buy SD shows for $1.99; HD shows will be $2.99 and you can watch them on your computer (as opposed to on your fireplace?). And NBC is coming back to iTunes too. They're bringing all their shows back: The Office, Monk, Battlestar Galactica, 30 Rock, Heroes, etc. And they'll be in HD. Wonder what kind of deal they made with NBC to get that?

10:05 PT - JS: I'll note that they are charging more for HD. I wonder if that was something to help NBC feel better about the store. Also, come on, NBC wants the money and Apple wants the content. I wonder how much pride was what stood in the way of the deal. But it's back in time for the fall season! Hurrah!

10:04 PT - DM: iTunes 8 is coming out today. A ton of new stuff in it. Here are the few main pieces: HD TV shows, as mentioned, accessibility. Built-in VoiceOver and other accessibility technologies. There are some new browsing options and something called "Genius."

10:04 PT - DM: Steve's showing off album browsing, but it's not so space efficient, especially for when you have few tracks per album. Adding ability to look at albums by album cover, and you can also look at albums by artist (just like in iPhoto, you can skim them). And it works with movies, TV shows, including unwatched episodes, podcasts, etc.

10:06 PT - DM: Genius. A new feature that lets you automatically make playlists from songs in your music library that "go great together - with just one click." There's a button in the bottom right corner that lets you make a Genius playlist. It's got a drop down for track limit. A genius sidebar makes recommendations from the iTunes store that might match the Genius playlist.

10:08 PT - JS: Just a funny note from the event. We are surrounded by the sound of fast, furious typing fingers. Is the entire world liveblogging this event? I suspect it is. They're all here.

10:07 PT - DM: How's it work? The iTunes Store is up in the cloud and they added "Genius algorithms" that they've developed. You can turn it on and it'll send info to iTunes about your music library: track names, play counts, ratings, playlists (seems like a good way to build a huge library of information). It's all anonymous; your IDs are not kept around. Not just info from one person, obviously: they combined it with all the other iTunes users as well. As more people send up their information, Genius gets smarter and smarter, and the results start. (Dan Frakes comments to me that this is how Skynet starts. Come with Steve if you want to live!)

10:09 PT - DM: Here's a demo of Genius. The browsing interface looks a lot like iPhoto. He's playing "Respect" by Aretha Franklin; classy choice. It works in Genre too, with little placeholder icons for the different music types. Can also scan albums by composer, which is nice for Classical fans. We're going to take a look at an HD TV show—The Office. I think he's actually showed this clip before.

10:11 PT - JS: Lots of applause for that clip. Honestly, I think the clapping was more for Jim once again frustrating Dwight (this time by pairing his bluetooth headset with Dwight's phone) than about the HD quality. But it did look good.

10:11 PT - DM: And now Steve's playing John Mayer. We knew he had to show up in some form, right? So, he's made a playlist of songs that go with Mayer's piece. Coldplay, for example. Here's another one, with Elvis. He picks Heartbreak Hotel. Make a playlist out of that and it adds Buddy Holly, Roy Orbison, Lynyrd Skynyrd, Chuck Berry, Bo Diddley and more. Bringing out the sidebar shows some Elvis albums that Steve's missing and some other artists like Jerry Lee Lewis, Fats Domino, and others.

10:13 PT - JS: I think it's safe to say that we are officially rocking. Right, Dan? Are we rocking now?

10:13 PT - DM: iTunes 8 is available today as a free download at apple.com. And yes, Jason, we are indeed proverbially "rocking."

10:14 PT - DM: Now on to the iPod. NPD Data shows iPod with 73.4% market share in U.S. Number two is actually "other"—no name brands aggregated together—with 15%. SanDisk is #3 with 8.6 and #4 is Microsoft with 2.6%. Around 5,000 iPod accessories. "They announce products even before we want them to. It's, uh, funny." 90% of U.S. cars offer iPod integration. Cumulative iPod sales over 160 million.

10:15 PT - DM: Here are some updates and new products for holiday season. iPod classic is first up: thick and thin versions. Almost everybody has one of the thin ones, not the thick ones, so they're discontinuing the thick one. The 80GB jumps to 120GB for the same $249. Started with 1,000 songs in your pocket; now 30,000 songs.

10:16 PT - DM: iPod nano. Shipped the first nano in 2005. Second generation in 2006, third-gen in 2007. Only three years. But we have a new iPod nano for this holiday season. And it looks a lot like the spyshots that have been going around: much taller with a larger screen. "Best of both worlds." Portrait aspect ratio and same display in portrait mode. Thinnest iPod they've ever made. Looks to be about the same height as the 1G and 2G. He's got one in his pocket. Nice looking screen. Pretty darn thin; it's got an oval cross-section. (Is it just me, or does Steve's shirt have a seam down the front of it?)

10:17 PT - JS: Is this the last update ever for the classic iPod? I suspect it may be.

10:18 PT - DM: New curved aluminum design, and curved glass over the display. Thinnest iPod ever built, enhanced user interface, and it's got the iPhone/iPod touch's accelerometer. And you can create Genius playlists right on the nano. The new interface looks a lot like the interface introduced with the 3G nano/iPod classic. Full-sized album art, and it inserts album covers at the bottom. And, of course, you can flip it into landscape mode. Holding down center button brings up a pop-up menu, browse albums, artist, build genius playlist all from the playing. Voice Recording program built-in, along with all the other standard additions (clock, timer, etc.)

10:22 PT - JS: It's interesting, Apple is rolling in features that used to be more advanced or only available with add-ons, right into the product. The nano is basically the mainstream iPod now, if it wasn't already.

10:20 PT - DM: Demo time. We're playing Beck and Steve flips the iPod sideways and it goes into Cover Flow. Now he's flipping through and picking Bob Dylan and listening to a new song. Pushing down the center button lets him start a Genius playlist based on the Dylan song. Holy crap, if you shake the iPod, it'll shuffle your songs. "I didn't really want to tell you that I had Dean Martin on my iPod." A quick look at photos. Tilt it and you go to landscape. "Just works really, really well." And that's the iPod nano.

10:23 PT - JS: He shakes that nano a second time and it's John Mayer. That dude is everywhere! Is he getting royalties? Free Apple computers for life?

10:23 PT - DM: The nano gets a pretty nice round of applause from the audience. They've also got improved battery life: 24 hours of music and 4 hours of video. They also want to be environmentally conscious: we have an internal environmental checklist that we use on everything. The new iPods's have arsenic-free glasss, BFR-free, Mercury-free, PVC-free and highly recyclable materials. "There's more we're going to do in the future, but these are the cleanest, toxic-free iPods we've ever built."

10:25 PT - DM: Nano-chromatic. They come in "the best colors we've ever done." And yes, Steve Jobs has put rainbows in the iPod, at long last. Purple, blue, green, yellow, orange, red, pink, and silver. And the prices: $149 for 8GB; $199 for 16GB. Both are shipping today; 8GB's shipping today, 16GB should be in stock by the weekend.

10:26 PT - DM: Let's talk accessories: armband. New headphones have a built-in remote: pause/play, goes to the next song, and triple click it goes to previous song, and there's volume up/down controls. That's pretty sweet. And there's even a mic built-in for the Voice Recording app. If only I actually liked the iPod headphones. Headphones will ship for $29 next month.

10:27 PT - JS: Score! The nano comes with headphones with a built-in inline remote, with volume controls as well as next/previous. Of course, you have to use Apple's headphones. Some of us love them, some of us hate them, but that's pretty cool.

10:28 PT - DM: New in-ear headphones. "We think we've finally got these right." Ship with three sets of earbuds, 2 drivers (woofer and tweeter) in each side. Sell for $79 in October. And here's the new ad. "If you'd like to see it, I'd love to show it for you." Nobody ever says "no" to that, huh? There's apparently a black nano. Sounds like Feist, not sure. And they show the colors bleeding of all of them—that's actually a little creepy.

10:29 PT - DM: Let's move on to the iPod touch. For this holiday season, we're making the iPod touch even better. It looks a lot like the iPhone. Same tapered back. Looks like it has external volume control. And it's apparently even thinner than the last. Same 3.5" display; integrated volume controls, which was the #1 request they got (including Mr. Frakes); accelerometer; wireless network; built-in speaker (really hard with something this thin—"It's for casual listening; this is not for audiophiles."); Genius playlist creation; and the App Store built-in. Demo time (saw a quick flash of a Nike + iPod app).

10:31 PT - JS: This is great to see. This basically brings some of the most important missing features from the iPod touch -- which made it difficult for it to use some iPhone software with it. If the nano is now the mainstream iPod, the iPod touch is fast on its heels.

10:31 PT - DM: Slight UI tweaks. They've built in Nike + iPod in to the iPod touch. And the iPod touch doesn't even need the little receiver to plug into the dock-connector port. All you have to do is get the transmitter for your shoe. And built-in Genius playlists: tap to get the scrubber and there's a Genius button. Tap that and you've got a new Genius playlist. You can refresh it or save it.

10:33 PT - DM: And, of course, the App Store. Steve says users have downloaded over 100 million applications. "Even more mindblowing" when you realize today is the 60th day the store's been open. There are about 700 games on the App Store; he's flipping through a lot of the games. It's available in 62 countries right now. Time for a demo.

10:34 PT - DM: He's loading up Green Day's "American Idiot" and create a Genius playlist: Weezer, Nirvana, Jim Hendrix, John Mayer (tell us the truth, Apple: is John Mayer in every Genius playlist?).

10:36 PT - DM: Steve is loading up Iron Man, which is isn't actually out yet, but that doesn't stop Steve Jobs. Have to say it looks pretty good (the sound's out of synch a little bit, though). We're going to talk about apps, and Steve is bringing out Phil Schiller to talk about games that aren't out on the market.