The just-launched AT&T (NYSE: T) Mobile TV service is so good I watched the two-hour long 1982 comedy The Toy, featuring Richard Pryor without even really realizing it. In retrospect, I can see why mobile TV has been slow to take off—images are blurry, people are pixelated and lips and actions don’t sync with the soundtrack, and there’s long waits for loading and buffering. But this new service that AT&T has launched changes that because it doesn’t stream it over the cellular network. The service makes me believe that people will eventually watch TV on their mobile phone. Last week AT&T launched Qualcomm’s (NSDQ: QCOM) MediaFlo service, which is already being offered by Verizon Wireless (NYSE: VZ). The service uses broadcast methods, like the TV in your living room with rabbit ears. It does not use the cellular network. So far, it’s been slow for consumers to take off, but that’s most likely because it’s offered on a limited number of handsets, and it can be argued that up until now, they’ve been less than attractive phones. The cost might be another reason, but at $15 a month, it’s doable.

Video is below. (RSS readers will have to click through.)

More of the review after the jump…

Enter the LG Vu… Last Saturday, the packaged arrived on my doorstep (Sorry, I’m not the type to post pictures of me taking it out of the box). The slim, touchscreen phone is iPhone-like. It’s nice, and easily stored in your pocket, but it has the twist—TV service. On May 4, AT&T turned on the service, offering stations, including CNN Mobile, PIX (a movie station showing a lot of flicks from the 80s), NBC2GO, NBCNEWS2GO, Nickelodeon, Comedy Central, MTV, CNN Mobile, ESPN (NYSE: DIS) Mobile, Fox Mobile and CBS mobile. It’s in 58 markets already, including Seattle (where I’m testing it), Atlanta, Chicago, Dallas, Las Vegas, Los Angeles, New York, San Diego, and Washington, D.C.

What works:
-- The quality: Other than a few stalls, blips and skips, which were more like what you would experience on your home TV, rather than the internet, It worked great—even when driving down the street. I didn’t check-out the coverage areas, but within the city, the service was flawless.
-- The variety: Going into it, I was a little concerned that it would be hard to find something to watch given that the service is live—you don’t get to choose what program you wanted to watch, or when you wanted to watch it. But that didn’t seem to be a problem. It had a little something for everyone. At any given time, the options could include: Late Night with Conan O’Brien (in the middle of the day), soaps, children’s content, or the movie Karate Kid.
-- Easy-to-use: It’s a one-touch operation from the main screen with up and down arrows that quickly flip through stations. A program guide was available, much like for cable TV, but that seemed unnecessary (there’s not THAT many stations).

What doesn’t work:
-- On play-back: Call me spoiled, but I’m used to my DVR, and recording shows, and then watching them whenever I want to, or pausing the show and coming back to it later (which would happen a lot when you are mobile). Considering that phones can have a lot of memory, this seems like a no-brainer to build in...perhaps that will eventually come?
-- Traveling: The service costs $15 a month, but you wouldn’t be able to watch it on an airplane, which would be an obvious time where it would come in handy. Once again, a DVR-like service would solve that.
-- Commercials: It seems unfair to make me watch six commercials in a row when perhaps I’ve tuned in to only watch a few minutes of TV. However, I would have to say the commercials were not as bad as imagined. You are accustomed to them, even if you know you are paying $15 a month for the service. The movie service only has one commercial breaks, which is nice.
-- The screen: The resolution was great, but as you may expect, it doesn’t work well outdoors in the bright light.
-- Battery life: It’s pretty good, but keep the charger handy. I watched 2:45 minutes straight of TV, and lost one bar of battery life, however, a few hours later, the phone was completely dead and that did not include making a single phone call, or going online.