Steve Jobs kicked off Apple’s yearly September keynote this afternoon by unveiling an updated iOS and newly redesigned iPods.

“It’s the biggest change in the iPod line ever,” Jobs said. Shuffles are going back to button-based navigation, and it’ll come in five colors, each $49 (for 2GB). The iPod Nano is now a multitouch, which looks like a tiny square iPhone, and will be $149 for 8GB and $179 for 16GB. And the iPod touch? Thinner, sleeker, 3-axis gyro, and yeah, rear and front-facing cameras. The 8GB is $229, 32 is $299, and the 64 is $399.

Jobs also unveiled iTunes 10, which includes a new social networking aspect called Ping. (Watch out, Bing!) It’s “social music discovery,” according to Jobs, but you’re not actually sharing the music — just your opinions. The interface looks very Facebook-y, which I guess is the point.

Getting the “one more thing” treatment? Apple TV, to the surprise of no one. Jobs admitted that thus far, Apple TV hasn’t been “a huge hit.” Well, things are changing, he hopes: The second generation Apple TV fits in your hand. It has an HDMI cable, and it connects through wifi or Ethernet. All the content is rental, Jobs announced. “There are no purchases anymore. There’s no storage. It’s so affordable you can rent something several times for less than buying it. And you can stream from your computer.”

Movies are $4.99 to rent the day the DVD comes out (wow), TV shows are $.99 — though only Fox and ABC are on board so far. It’ll also stream instant Netflix content and anything off your computer. Jobs called it “the best implementation of Netflix,” and somewhere, a Roku gently wept. Um, your move, Hulu? The new Apple TV is $99, and it’s available for preorder now.

What are you drooling over, PopWatchers? Are you ready to go full-on multitouch with your gadgetry? Will you be hooking up Apple TV in the near future?