The Venice Project this week starts to open up beta-testing of the service to a much larger group of users. The ambitious effort aims to combine TV-quality video with the interactive and community features of the Internet. The system is also designed to keep down the cost of video distribution by relying on peer-to-peer technology rather than a large group of servers.

This puts them in direct completion with BitTorrent.

But Gerry Kaufhold, a principal analyst at In-Stat, views the Venice Project as a more innovative melding of the Internet and TV. He said the service would allow users to create their own customized versions of TV shows or other content, within the limits of copyright. Thanks to Mat Hall of the Venice Project in correcting this mis-information.

The project goes into test mode and likely will last for months. I'll report things back to you when something real happens.