Is the country ready for an $800 TiVo (NASDAQ:TIVO)? The digital video recording pioneer is rolling out a new high-definition DVR to woo couch potatoes looking for a little more zing from their home entertainment systems.

The Series3 HD is pretty nifty, built to harness the power of high-definition video, and it claims to be the first DVR to be THX-certified. (In other words, it should sound pretty darn sweet, too.) The Series3 HD also offers some welcome new features, like a front panel that shows the name of the show that is currently being recorded, and a backlit TiVo remote. TiVo has even turned to YouTube to post a promotional video on the new machine.

The new features don't come cheap, though. At $799.99, it's the priciest TiVo ever. A built-in DVD burner would have been nice at that price point. The system also isn't compatible with satellite television providers like DirecTV (NYSE:DTV) and EchoStar (NASDAQ:DISH); instead, it's limited to digital and analog cable buffs. That's a significant shortcoming, since most of the 4.4 million TiVo subscribers are actually DirecTV customers.

The rollout is part of a bigger strategy to make sleeker and more powerful systems. Capacity and quality are likely to drive the upgrade process. This month, TiVo is teaming up with CBS (NYSE:CBS) to download copies of a new CBS sitcom onto the TiVo boxes of willing subscribers before it even airs on the network itself.

A recent software upgrade for Wi-Fi-enabled Series2 systems allows subscribers to copy multimedia files from their home computers to their TiVos. Put the pieces together, and you know we can't be too far away from a video-on-demand service, possibly in cahoots with TiVo's buddy and fellow Motley Fool Stock Advisor pick Netflix (NASDAQ:NFLX). Then again, TiVo may try peddling that new revenue stream on its own.

The debut of the Series3 HD probably finds existing users kicking themselves for going with the entry-level 40-hour model. That buyer's remorse has created a robust market for third-party providers like PTVUpgrade to sell hard-drive upgrade kits for TiVo users. It also explains why the $800 TiVo is built for bulk. The Series3 offers a whopping 300 hours of standard-quality recording (or 25 hours in HD mode, according to a TiVo promotional video).

TiVo is taking the Series3 HD introduction so seriously that it's even offering owners under the lifetime subscription the opportunity to pay $199 to transfer that lifetime subscription to Series3 purchases this year. TiVo no longer offers a lifetime subscription option, preferring the steady stream of monthly recurring revenue these days.

TiVo keeps growing before our very eyes. But let's see whether, after coughing up $3,000 for a new flat-screen television, consumers go into sticker shock trying to justify that $800 price tag.

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Longtime Fool contributor Rick Munarriz does have a TiVo, but he does not own shares in the company. He does own shares in Netflix. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.The Fool has a disclosure policy.