Media streamers aren't exactly new, but there's another entrant to the field that works so simply and easily it should be nearly mandatory for any iPhone user. It's called Air Video—and it's only three bucks.

Here's the scenario: I've got a NAS with about a terabyte or so of video sitting on my network. Some torrented files, a lot of DVD rips I made myself, a fair amount of random Xvid and MKV files I've kept for years, and quite a few h.264 MPGs that I encoded of my own work.

Now, getting videos to an iPhone is relatively easy—if you want to convert them to h.264. Toss the file into Handbrake, fiddle with a few settings, and copy the converted file into iTunes to be synced to your iPhone.

Problem is, you've got to wait for the video to be converted. Then wait for it to copy to your phone. Then hope you have enough space to store it. Then delete it when you're done.

The natural solution, of course, is streaming. And several nice applications have been written that make that possible, including Orb and (which will also stream live TV if your PC has a tuner), Tversity (which can also stream to Xbox, PS3, and even DirecTV boxes). But Orb is $10; TVersity Pro is $40.

Air Video is $3. And it's so dead simple to set up that I didn't quite believe it had actually worked.

I downloaded the Air Video server software to my first-generation unibody MacBook Pro, pointed it at a local folder full of video, and activated it. (It's also available for Windows.) Then I opened up the Air Video iPhone app to find a simple directory listing. Within about three minutes from first discovering Air Video I was watching a 720p episode of a television program on my iPhone, streaming over my local Wi-Fi network.

Then I pointed the Air Video server at my NAS, suspecting that something would snag. My laptop wouldn't have the CPU power to convert the video in time. My 801.11N network would get clogged. But nope—Air Video happily chugged away, sending a real-time stream of my videos right to my phone.

I even tried watching a 13GB 1080p rip from the NAS. (Of a Blu-ray I own, thank you very much.) It worked—mostly. Air Video lost the stream occasionally, pushing the stream back in chunks as it rebuffered. Considering my laptop chokes on that file even when it's sitting on its own hard disk, I am not surprised.

Perhaps it shouldn't impress me as much as it does, but it completely changed the way I think about my media library and my iPhone. I already sleep with my iPhone at my side. And when the iPad arrives, I suspect it'll be on the nightstand, too. Now every movie or television show I have sitting around will be ready to watch in just about ten seconds.

Air Video manages to be both extremely simple to use, while extremely powerful for the settings tweaker.

If a video is encoded in h.264, a format which the iPhone can play natively, Air Video simply streams it. If not, you can "Play with Live Conversion", which uses the ffmpeg library on your Mac or PC to convert the file in real-time. (Provided your machine is fast enough. Most newer computers should be able to handle that just fine.) You can also tell Air Video to do a permanent conversion of the file to a h.264, although the real-time streaming works so well I can't imagine you'd find the need to do so very often.

There are tons of conversion settings that can be fiddled with, as well as different bit rates for streaming. But the default settings and guesstimates made by Air Video work so well, I haven't yet felt the need to touch them.

You can even stream outside your network if you turn on the "experimental" Remote setting. Air Video will generate a ten-digit PIN that you punch into the iPhone app which allows it to communicate with the Air Video server even when you're away from your home network. (I suspect it is doing some sort of simple DNS-like passing of your external IP to the company's servers, although I have not investigated this.) The takeaway is that you can watch all your movies even away from home, even over 3G. Again, this isn't a brand new idea, but to have it all work so effortlessly in a $3 app is. (There is also a free version that won't display all your files at once that works perfectly, should you want to test it first.)

I've been toying with the idea of selling my HDTV for a while. I use it, but could live without it. I've barely been playing console games at all over the last few months, using the TV mostly as a giant monitor connected to a Mac Mini that serves as a home theater PC. I'd been considering replacing it with an iPad, as silly as that might seem, simply because I live alone and rarely watch movies and such with guests.

I don't know if I'll sell the TV and the Mac Mini or not, but Air Video has made me realize that if I wanted to, I could get the same functionality on an iPad. I'll never be without my video library again. Not bad for three bucks. [iTunes]