In the Macworld keynote, Steve Jobs did say that “current generation iPods” would be able to utilize rented movies, but notice he did not say ALL video capable iPods, so there may be some truth to the idea that this is intentional. Perhaps Apple simply hasn’t updated the firmware on these iPods to support the rental functionality, they could be readying an update right now to allow 5G video iPods to playback rented movies.

However, it would seem unlikely that Apple would let this sort of incompatibility slip through the cracks. It may also be possible that these rented movies are protected to a further degree than other iTunes content, which may have caused compatibility problems if the older video iPods are incapable of supporting the tougher protection.

There has also been speculation that the recent move of the video output to the dock may be related, but this is unlikely. Users have theorized that by removing the video output from the headphone jack and requiring that an authentication chip be present in the new video cables, Apple was trying to close the analog hole to protect rentals and other video. But this is not the case, even the new iPod classic and iPod Nano will happily output the same analog video as the older 5G iPods, so the analog hole still exists for these new iPods, and that isn’t it. It also would seem unlikely that this analog output represents a real threat to content anyway, users are unlikely to go to the trouble of recording the video output and digitizing it all over again just to get around the DRM.

The real answer may be that, even though users are going to hate it, Apple isn’t going to support rentals on the 5G video iPod.