"More like a nerd rock show," chimed in NY Tech Meetup's Nate Westheimer, heading to the bar.

Digerati like Union Square's Fred Wilson and Foursquare's Naveen Selvadurai mingled in the VIP section above the crowd, while attractive 20 somethings cadged free drink tickets from Boxee staff. "A lotta guys in this room are going to be 10X exits someday," a startup founder said appreciatively.

The event was a launch party for the Boxee Box, one of the most stylish entrants in the fast-growing world of web TV.

"We expect the networks will try and block us, just as they did to Google," Boxee CEO Avner Ronen told The Observer. "But we're in this for the long run. This is a seven-year war."

A nervous cable executive confided that it would be a bloody battle. "The big networks and the basic cable folks, they don't want a web TV world where consumers pick and choose shows a la carte, because that means when it comes to programming, you can't have any filler."

Ronen showed off the Boxee box to the crowd, which greeted him with a cheer.  The software's social features, watch-later and integration with music and video were all impressive. The remote, easily the hardest part of designing web TV (see Sony/Google TV), seemed intuitive and sleek. 

For now, Boxee's major content partners are Netflix, Vudu, Pandora, MLB and NHL. It also has some cool smaller players, like VBS.TV. Netflix won't be available till the end of the year however, and talks with Hulu are still ongoing. Without those two, Boxee is a much tougher sell to the average consumer.

"We're reaching a tipping point now," Ronen said, "The smart players are going to ride the web TV wave early."

It was a confident statement from a CEO who was enjoying his raucous product launch. Whether Boxee will be able to capitalize on that change, with big players like Google and Apple pushing strongly into web TV, remains to be seen. The networks, which in particular fear Google's reach as a player in the advertising market, may prefer to back smaller players like Boxee.

Either way, Ronen isn't worried. "There is enough room in this market for all of us to grow substantially." The real issue is the barriers to content being put up by the entrenched players. "A giant like Google is just helping us to kick down that door."

According to Mr. Ronen, the MLB.tv deal is a "holy grail" of sports content—with thousands of ball games, available  live and on-demand. MLB.tv's premium package also offers DVR-like features so users can pause and rewind a live game. Users will dole out a $89.95 yearly fee so they can watch MLB games streaming on their PCs. (Peanuts compared to box seats!)

The Boxee team worked directly with the company to create the MLB.tv application. Mr. Ronen declined to give further details on the deal (like whether Boxee will itself generate revenue from the subscription service). But he emphasized Boxee's big step in working so closely with a content provider and said that he hopes other media companies will team up with him to create customized services for the software.

"It proves that Boxee is friendly to content providers," Mr. Ronen said. 

Mr. Ronen called in to The Observer yesterday hours before he stood before more than 900 Boxee fans at a San Francisco club and announced several new updates to the platform with a flashy party.

On his blog, Fred Wilson, who is a Boxee investor as managing partner of Union Square Ventures, wrote about the new developments. "This is just the beginning for Boxee, and bringing video on the Web to your living room television. I'll use a baseball analogy in honor of MLB's partnership with Boxee. I feel like this 'Web video to the living room' is a nine-inning game and we are in the first or second inning right now. It's going to be exciting to watch and participate in."

So far, Boxee has been sequestered to a slightly underground, early-adopter crowd, despite all the media buzz about their content battles with with Hulu.

But Mr. Ronen announced another update that will bring Boxee out of its britches—an early-stage release of a Microsoft Windows application.

Previously, Boxee was only available to the Apple and Linux faithful and, so far, Boxee is only halfway to their one-million-user goal. But opening up the platform to PC users will push them into the mainstream—which is where Mr. Ronen wants to be to stay ahead of his competition and get on a more TV-friendly, TiVo-like device by 2010.

Along with rumors that Steve Jobs might have his eye on a more Web-to-TV-friendly device than the Apple TV, other TV companies are integrating Internet capabilities with their new screens. Vizio, for example, is releasing a Twitter-, Flickr-, Netflix-enabled TV.

So Boxee has a long way to go, yet—but is certainly still in the race.

Being a developer-friendly platform has been helpful for Boxee. They love the platform and want to work for it—for free. Last night, Mr. Ronen and his team announced winners of their Developer Challenge, in which about 40 developers rushed to create applications and integrate new content into the system. The platform now offers about 120 applications, including ones for Drop.io, AnyClip, BBC Live, and We Are Hunted, a music site that tracks the bands generating the most discussion on social networks.

Boxee will also be adding more social features. They are integrating Current.tv content and a "Digg for TV" application, in which users can browse the most popular videos their computer (or TV) screen.

Digg "has been instrumental in discovery on the Web and discovery about what is going on with TV is what is missing in the Internet age—it's missing the discovery tools," Mr. Ronen said. Boxee plans on allowing users to "Digg" stuff on their TV screen in a future release.

Finally, David Karp's Tumblr team also worked with the Boxee team to allow users to stream music and click through photo slideshows from their followers. We're sure they'll "like" that.

Boxee is not actually a physical box but a software program that users can download for free. It searches all of your connected devices—from your hard drive to your iPod—and scoops up photos, music and videos, and then organizes them into an elegant interface that you can view on your screen. It also aggregates videos and music from content providers like NextNewNetworks and Blip.tv (both presented at Tuesday night's Meetup), Comedy Central, CNN and many others, including Hulu.

But when Mr. Ronen first mentioned NBC and News Corp.'s joint video site at the Meetup, an audience member was overheard hissing. "No, no, we love Hulu," Mr. Ronen said with a wily smile. Although Hulu was never an official partner with Boxee, its content was available on Boxee until Hulu's content providers requested that executives block access. Boxee created a work-around by integrating Hulu's RSS feed, but Hulu blocked that, too.

Now, Boxee has a new solution—their own browser. Users can now select Hulu videos on the software's interface (Lost and Heroes are popular choices) and a browser will launch, automatically detect the video on the page and open it in full screen. Voila! Now, "if it's on the Web, it's on Boxee,” Mr. Ronen told The Observer in an earlier interview.

Another addition to the new version of Boxee is the integration of Pandora, the popular Internet radio service that specializes in creating a "one-click personal radio experience," said Tom Conrad, Pandora's chief technology officer, from the Webster Hall stage. Users will be able to listen to Pandora's carefully curated radio channels and create their own "stations" based on artists and albums of their choosing. They can also use the "thumbs up" and "thumbs down" feature to narrow their preferences.

"At home, that’s the only music we listen to," Mr. Ronen told The Observer. He added that Pandora was the most requested service to be integrated with Boxee after Netflix.

Another new application, called Radiotime, automatically detects users' IP addresses to find their exact location to provide local radio stations available for listening. Users can listen to stations like WNYC and WNYU right from their television screens with Boxee.

Boxee is also releasing a new version of their API so developers can build applications on top of the system and add whatever content they want. The New Jersey natives behind Boxeehq.com have already created applications for Open Film and Game Trailers, and for the new version of Boxee, they are releasing a PBS channel. Fire up Frontline!

Mr. Ronen called for developers to make Boxee into whatever they want it to be.

Mr. Ronen and Whitney Hess, Boxee's user experience designer, also presented a preview of what Boxee's beta version will look like, including a more customizable home screen, a global search for shows instead of sifting through content providers' channels (right now you can only find 30 Rock if you go to NBC's page, for example) and improved social networking capabilities. (Mr. Ronen mentioned that one religious Boxee user was accidentally sent the infamous pornographic video "Two Girls, One Cup." Whoops!)

Mr. Ronen said his team has been hard at work on the new alpha version of Boxee, but they’ll be working on the beta version, which will be much friendlier to mainstream audiences, during the next few months. He guessed it might be released "maybe by the end of the third quarter."

The Meetup was a relative success for Boxee. Pizza and beer were served to the packed crowd. T-shirts were thrown into the audience stadium-style, and, despite an audio mishap earlier in the evening, spirits seemed high. Integrating Hulu back into the software was something of a triumph for Boxee, which has been in a David vs. Goliath battle with Hulu since mid-February.

But with tonight, “We want to put the Hulu thing behind us,” Mr. Ronen said, sitting in an office by his Park Avenue home base at NextNewNetworks the morning before the Meetup.

"The idea of Boxee is scary for them," Mr. Ronen said.

In a February 18 blog post, Hulu chief executive Jason Kilar wrote that they would be blocking the site's content on Boxee at the request of their content providers.

"While we stubbornly believe in this brave new world of media convergence—bumps and all—we are also steadfast in our belief that the best way to achieve our ambitious, never-ending mission of making media easier for users is to work hand in hand with content owners," he wrote. "For those Boxee users reading this post, we understand and appreciate that you're likely to tell us that we're nuts. Please know that we do share the same interests and won't stop innovating in support of the bigger mission."

"They love the application, they just don't like what it's doing to their business," Mr. Ronen said. But perhaps, he continued, content providers like Hulu should see this as an opportunity to prepare for an inevitable future. "Don’t try to fight it or delay it or ignore it, rather they should participate and see it as an opportunity to explore new business models."

"The risk of not doing it now is that users will turn to solutions that don’t respect their copyright," he said.

But Hulu and the like still have time. Boxee currently has about 370,000 users, Mr. Ronen told The Observer. "We're still talking about the early adopters here," he said. "It's not going to move the needle for anybody."

As for Mr. Ronen, he wants to look past Hulu and continue to attract the "big enchiladas," as he put it.

He also told The Observer that he plans on making Boxee available on a hardware device by 2010. Users who own an Apple TV can already create a TV set-up with Boxee. But Mr. Ronen is in talks with device and board-makers working on embedding the software into an easy set-up box that can sit on top of your TV—no hacks necessary (think TiVo). "That will be the big step into breaking into the mainstream," Mr. Ronen said.

As for the new version of Boxee, Mr. Conrad, of Pandora, told the crowd at the Meetup that he "can't wait to go home and install it."

The crowd probably couldn't, either.