Optical media may be dying but it ain’t dead yet. While streaming HD video content is a reality in some peoples’ living rooms, a range of issues still have to be overcome before “The Cloud” kills “The Disc” dead for good. For some, their home Internet connections are simply too slow to download HD video in a timely fashion. For others, the difference in quality between a compressed 1080p video stream from the Web and the same content coming from a Blu-Ray disc is simply too much to bear when shown on a 55-inch HDTV. And if you’ve got a Netflix account or local video store membership, it’s often cheaper to rent Blu-rays than it is to stream HD movies at $5 a pop.

Then again, on-demand Web video is really handy, really fun, and getting better all the time. So it might just behoove you to have the best of both worlds at your fingertips: High definition content on a Blu-ray disc and an always-open video store by way of online sources like Netflix, Vudu, and YouTube. This is where a Smart TV product like the Philips BDP7520 comes in handy, or should, anyway. For under $200 you get a 3D-capable Blu-ray player, and a networked media streamer with access to some premium online services and the ability to display most anything you want to beam to it from a computer.

I’m not going to give a full review of the BDP7520, mainly because I’m not yet equipped to delve into detailed assessments of things like black levels, color performance, and so on. I can tell you that the player’s Blu-ray performance was good in my limited testing, and 3D content is supported. One oddity is that audio out is limited to coaxial and stereo RCAs – there’s no dedicated digital audio output, though if you’re using HDMI for audio and video (like I did), this won’t be an issue. The player supports both WiFi and Ethernet connectivity, though I had some trouble connecting my review unit to our wireless router. I wound up testing via Ethernet, anyway, to insure the fastest possible data speeds for accessing online content.

Connecting the 7520 to a network opened the door to two types of online content: Video on demand and MediaConnect, which is Philips’ spin on DLNA/AirPlay style content sharing from a computer. PC users can connect to the player right out of the box, but Mac/Linux users aren’t officially supported. I poked around Philips’ support forums for a workaround involving the installation of a DLNA server and wound up trying both iSedora and Twonky for beaming video from my MacBook Pro to the Philips. No luck in either case. I tried again using a Windows laptop and the official MediaConnect app. While it didn’t like my home router very much, I eventually got things working and the system worked fairly well, though I don’t really see it as something mainstream users will flock to. It’s probably best to think of MediaConnect as a bonus feature you might fiddle around with sometime, and not a key reason to buy a BDP7520. Unless, that is, you’re in corporate purchasing and really need a combination Blu-ray player/wireless laptop-to-TV solution. Then you’re in the money.

Philips’ streaming content offerings on the BDP7520 are good but not excellent in terms of both breadth and execution. Netflix playback quality was good, but the interface lacks the ability to browse and add new titles, something products like Apple TV offer; Philips’ implementation limits you to watching what you’ve already lined up in your Instant queue. Vudu kicks butt like it always does; the interface is great, the HDX streaming is high-quality, and the movie selection continues to improve. Vudu apps now offers some functionality one like Facebook, flickr and Pandora access that other systems like Samsung’s Yahoo! Widgets-based UI offer from the main menu. Philips might want to make it clearer to consumers that Vudu offers Web apps as well as content for purchase and rental. Blockbuster and Roxio Cinema Now are basically fringe additions not likely to get much attention at this point.

Both the unit itself (via stickers on the top edge) and Philips’ website reference something called “Net TV,” but at this point that’s just a catchall term for network connectivity. Apparently the 2011 model, due out in May, will feature a Net TV menu option. The 2010 model, which I have, only featured a sticker that caused me to hunt up and down through every menu on the machine – and then email my PR contact – wondering what I was missing. The answer, of course, was nothing. I also had some issues with a phantom Software Upgrade option: A dialogue box popped up from time to time asking me if I wanted to install a new update, but I literally couldn’t answer. The remote continued to cycle through the main menu options beneath the pop-up menu, and there was no way to actually tell the machine to begin the update. Poking around the manual update menus yielded nothing besides messages telling me my player was already up to date.

Philips’ BDP7520 is a decent choice if you want it all on a budget and can deal with a few quirks. As I said, I don’t feel qualified to speak authoritatively about Blu-ray and 3D performance, but to my eyes the Philips handled optical media pretty well. The remote is fine, the onscreen menus are pretty nice, and with the exception of the unit not wanting to play nice with my (admittedly old) WiFi router, setup was pretty easy. The MediaConnect feature is new and interesting and kind of a niche thing, and while the Netflix integration isn’t the best, it’s better than paying twice for a Blu-ray player and a separate Netflix box. Plus, Vudu HDX rocks if you have a 1080p TV and a fast Internet connection.

All that said, those 2011 models are apparently only a month from hitting store shelves. So you might want to hang on to that $200 to see what the next-gen of Philips connected Blu-ray players brings. We’ll be sure to get our hands on one of the new units, and post an update, as soon as we can.