(FORTUNE Magazine) – It's blinking red again. Natalie Sana smiles, wondering who has sent her mail. She plops down on the couch with remote in hand, aims at the black box atop her TV, and thumbs the button that reads WEB. Her TV screen shows an animated highway cutting through a digital landscape. Music thumps and hums. In one corner of the screen is an indicator that tells the self-described computer hater she's almost connected to channel Internet. She settles back, thinking that maybe after she reads her E-mail, she'll check out a few of those Web programs...

Sana is not a figment of General Electric's Progressland. The 39-year-old gym teacher and mother of two is a participant in a market-research test for WebTV Networks, a startup that hopes to bring the World Wide Web and E-mail into the living rooms of millions of Americans via the boob tube.

The people at WebTV Networks swear this is not a novelty item. In fact, CEO Steve Perlman maintains that his WebTV product is nothing short of revolutionary. This may not be just hubris. Perlman and his team have significant backers: media mogul Marvin Davis and multibillionaire Paul Allen helped pay for the development of the product's design and feel, as well as for a proprietary technology that makes sure the Web images that appear on your TV aren't flickering messes.

This fall, licensees Sony and Philips will deliver the actual hardware, which consists of a set-top box and a remote control. Price: under $350. The remote control looks ordinary, except that it has arrow keys at its center that move a cursor around the screen. An extra $50 or so gets you an infrared keyboard that will enable you to dash off E-mail to friends and family from the safety of the sofa.

Now all WebTV has to do is convince those whose VCRs still flash "12:00" that it's easy to hook up a modem and surf the Net. Josh Bernoff, an Internet analyst at Forrester Research in Cambridge, Massachusetts, says the technical annoyances associated with computers and modems will keep WebTV, or any such Net-based appliance, from going mainstream.

That may be, though Perlman and crew have done a good job of making WebTV easy to install and use. All you do is attach the set-top box to your TV and run a phone line from the box into a wall jack. The first time you turn on the service, you get a screen that asks for your name and credit card number. Once you've anted up (the service costs around $20 a month), the built-in modem connects you to a local Internet service provider. Another nice feature is a simple display on the box to signal connection and E-mail status. A green light means the device is on; yellow means you are connected to the Web; blinking red means you've got mail.

Besides ease of use and E-mail, WebTV has other attractions. It could, for example, feed sports junkies with stats and scoring histories during broadcast commercial breaks. A related (and possibly even more powerful) lure is the historical driver of consumer-electronics innovation, pornography. The Web, of course, is full of digital nudies; many people might buy WebTV to take in porno sites in the privacy of their own home, just as people originally used VCRs to watch X-rated movies. (For parents concerned about their children stumbling across--or actively seeking--Net porn, WebTV has incorporated SurfWatch software. It lets parents block access to certain sites.)

WebTV is not the only company getting into the business. Silicon Valley startup Diba has gotten lots of press for its designs for Internet appliances. And while Oracle, Sun Microsystems, and IBM are focused on the business market right now, they'll want to hit up consumers eventually. After all, it sure is hard to bet against a contraption that manages to exploit simultaneously the id, the libido, and the profound urge to sit and watch TV.

REPORTER ASSOCIATE Eryn Brown