(FORTUNE Magazine) – Microsoft's new Ultimate TV enhanced television service raises the obvious question: What is so "ultimate" about it? If your idea of ultimate television is surfing through 225 satellite channels, matching wits with game show contestants, helping Judge Judy decide whether the reprobate of the day needs jail time, recording every episode of Star Trek, getting junk e-mail delivered directly to your TV screen, or ordering a pizza and some exercise equipment without the hardship of reaching for the cordless phone next to your La-Z-Boy recliner, this may in fact be the ultimate in television, at least until someone invents the 3D holodeck.

Ultimate TV is the love child of a computer and a satellite, a combination of several hardware and software components--all of which connect directly to your wallet. It comprises a DirecTV satellite entertainment subscription system ($22 to $83 a month, depending on your appetite for movies), a special rooftop dish capable of pulling in two channels at the same time (about $50 plus $200 installation), an RCA or Sony 35-hour satellite receiver and digital video recorder ($399), and a TV set (your current one ought to suffice). The Ultimate TV subscription service ($9.95 a month) includes 14 days of searchable TV listings, all the video recorder and live TV controls, and three hours of Microsoft's WebTV Internet service and Interactive TV (a truly witless offering, as I'll explain later). There may be special deals to reduce the cost of the satellite dish and installation.

On one level, Ultimate TV competes with TiVo and Replay TV, the two original developers of the digital video recorder (DVR). A DVR records programs on a hard disk instead of a videotape, and it allows the viewer to pause live TV, zap commercials, do instant replays, slow motion, and freeze frames, and instruct the magic TV fairies to search through TV listings automatically and record every movie and talk show in which a certain word or name appears. Like "The Sopranos" or "Elizabeth Hurley."

On another level, Ultimate TV is Microsoft's Trojan Horse, intended to sneak the company's software into your living room while you're distracted by Elizabeth Hurley. Like its rival AOL (parent of FORTUNE's publisher), Microsoft sees the TV set as a delivery system for new types of software and services that bypass the personal computer. Only about half of American households have a PC, but nearly every house has a TV.

If you already have a low opinion of television, Ultimate TV is your worst nightmare. If programming the clock on the VCR gives you a migraine, Ultimate TV will trigger a full nervous breakdown. It requires professional installation, and the remote control is a fistful of confusion.

But if you love TV, and regularly bemoan the fact that your daily schedule does not permit you to watch all the shows you want to see when you want to see them, the Ultimate TV service is the best thing to come your way since the VCR.

Ultimate TV is sort of better than TiVo and Replay in one way, and sort of worse in another. It is better because Ultimate TV lets the user watch and record two channels simultaneously. Technically speaking, it is a dual LNB system, and not even the professional installer knew exactly what the heck LNB stands for, so let's just call it a satellite dish the size of a garbage can lid that bolts onto your roof and has two fat wires running into your house. The receiver is a box that connects to your TV with so many wires and connectors that you'd think it was on life support. It contains the two tuners and the hard disk recorder.

TiVo's rival boxes actually have two tuners built into them; TiVo just hasn't activated the second tuner yet.

The Ultimate TV system works only with satellite systems, and as a result of its pure digital source signal, the picture quality is often better than cable's. But satellite systems are also more complicated to install and navigate, which can be intimidating to people who still can't figure out how to program their VCRs. Also, satellites require an unobstructed view of the southern sky. TiVo and Replay, on the other hand, work with cable and regular broadcast TV, which is where they get the edge.

Now, finally, let's turn back to that unadulterated delight, Interactive TV. Some people are content to confine their interaction with a TV to something physical, like, say, throwing a shoe at the TV whenever something annoys them. Some people want more, like online chats, instant messaging, and shopping. During the NCAA basketball tournament last month, for example, Ultimate TV users could watch the game in one window and call up statistics for the teams and players in another. Interactive TV also lets you play along with game shows and compete for prizes. I had my heart set on competing on Jeopardy and Wheel of Fortune, but those shows dropped their Interactive TV services earlier this year. Microsoft asserts that there are 750 hours of interactive TV programming a week, and I'm not going to sit in front of a TV long enough to attempt to disprove them.

Ultimate TV users also have the opportunity to sign up for Microsoft WebTV service, which enables people to browse the Net and send and receive e-mail via TV. Internet-on-TV was invented by the same team of researchers that discovered the use of hot wax to remove unwanted body hair. It may appeal to people who refuse to buy a personal computer, but otherwise it is a slow (no faster than dial-up modem speeds) and awkward (ever try typing on a TV remote control in the dark?) experience.

If you want better picture quality via satellite, and the ability to record two shows at once, and to do all the cool things that a DVR can do--and if you can afford the steep cost--Ultimate TV is the way to go. But forget Interactive TV and WebTV. If you want e-mail, Web-surfing, and other computer-like services, do yourself a favor: Get a PC.

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