::UPDATE:: D-Link says service is FREE unless channel already charges, such as Movielink.

I feel like I’ve heard this one before. A company jumps into Internet TV offering dozens — no hundreds — of “channels” for your viewing pleasure. Only the channels are obscure, content is infrequently updated or required spending money on hardware.

Hopefully, Fountain Valley’s D-Link Systems has figured a way to make this work. Today, it announced a new service for its MediaLounge player, a device that connects a TV to the home computer network.

The service offers more than 200 channels of Internet TV to users of its MediaLounge player, a gadget that connects your TV to the Internet.

While watching D-Link’s new “TV” service only works if you buy the $250 DSM-520 MediaLounge, unclear is whether the Internet TV service will cost extra. Just heard back from D-Link. Service is free for most channels, just as they are online. But if they charge online, MediaLounge customers will have to pay up too.

Channel lineup seems hopeful. Some channels mentioned include MTV, VH1, Comedy Central, BBC News and 32 other mainstream channels. I imagine these are limited versions of the actual cable channels, much like another Internet TV service Akimbo, which recently changed its business plan to offer service only, leaving customers stuck with a useless piece of hardware.

Previously, the MediaLounge was pretty much just a machine that fed the living-room TV all the video, music and photo files it stored on connected computers in other rooms of the house.

Internet-wise, the service offers videos from YouTube, Google Video, AOL Video, CinemaNow, Movielink, ROOtv Music Videos, Akimbo, MTV, Musicmatch, Napster, ESPN, FOX Sports, MSN TV Today, Reuters News, Yahoo! Sports and eBay. Plus there is international programming from 14 countries. More details should be posted later today here: www.dlink.com/activetv

D-Link isn’t becoming a TV station. Instead, it’s using MediaMall Technologies, a company that aggregates shows and channels.

The DSM 520, by the way, is not only wireless but it can display high-definition media. The player includes an HDMI port (for the highest-definition connection), plus the usual video connections such as component, S-video, and composite output.

Existing DSM-520 customers can upgrade their product for free.

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