Steve Jobs Pitching Mac OS X at the recent Seybold conference in San Francisco.

Macworld SF 2001 — The hype machine kicked into high gear when Apple moved Steve Jobs’ keynote address to Monday. Then uncharacteristically, Apple began to fuel the speculation fire with bold statements on its own site such as: “To Go Where No PC Has Gone Before” and “Just One More Sleepless Night.” What’s this –Sleepless in San Francisco! Hmmm … could it be that good?

Meanwhile, the rumor sites were churning out reports about the iWalk, flat-paneled iMacs, 1 GHz Power Macs, and a host of other semi-educated guesses. Apple just kept stoking the flames without revealing any details.

If you’ve ever been on the show floor the day before a big Apple announcement, you know they take secrecy to a new level. Since O’Reilly has a booth at Macworld, I was able to get an exhibitor’s pass to get on the floor Sunday night. After checking our crates to make sure everything was delivered without damage, I casually wandered by the Apple area.

The entire empire was surrounded by a thick black curtain at least 10 feet tall. Security personnel roamed the vicinity to make sure no one saw what was going on behind the scenes. The area would remain this way until Steve broke the news.

And what was the news? The iMac is reborn. Those of you who read my Mac DevCenter newsletter on Friday know that it was one of the improvements that I believed Apple had to make. And boy, did they ever.

The new iMac, with a G4 processor, combo drive (CD-RW and DVD) and nVidia graphics card does have a flat-paneled screen — no real surprise there. But what folks didn’t anticipate was the incredible new design to support it. The flat panel seems to float in the air, only connected to its domed base by way of an elegant chrome arm that allows you to position the monitor to your perfect height and angle.

The white, domed base looks about 10 inches in diameter and houses the brains for the computer. How did the engineers get all of those components into such a small base? Do you remember the Cube? Apple has been working on this design for sometime now, and today they get to celebrate their efforts. The basic model should be available in March for $1,299 USD, with an advanced model to appear later this month for $1,799 USD — that’s right, they’re shipping the advanced model first.

The new iMac will be the center of the digital hub. To help round out its software offerings, Apple also announced iPhoto to accompany iTunes, iMovie, and iDVD. iPhoto is the digital image solution that we’ve been waiting for. It breaks the chain of pain for importing, editing, and printing, by providing seamless archiving at the point of download. Anyone who is managing hundreds of digital pictures knows how important this function is. iPhoto is free to Mac OS X owners and available for download today.

Also as of today, all Macs will ship with the default boot on OS X. It’s the right time for this. Steve told us there are more than 2,500 native OS X apps now.

Steve also updated us on the iPod’s out-of-the-gate performance. Apple sold 125,000 iPods in the first 60 days. Some of those were sold at Apple Stores, of which there are 27 open now, with more to come. Jobs went on to say that 40 percent of the retail store customers are first-time Apple buyers — that’s got to impact Mac’s market share. Last month, the stores had 800,000 visitors.

So was it worth the hype? Well that depends on what you were hoping for, right? Regardless, you have to admit that Apple continues to push the personal computing envelope. My first impression is that the iMac is going to be a home run, and as for iPhoto, I can’t wait to get my hands on it.

For more in depth analysis, look for Daniel Steinberg’s keynote report later today on the Mac DevCenter. As for me, I’m off to take some pictures.

Give us your take on the new iMac.