Last year we reviewed the Roku LT, a cute streamer with Wi-Fi hookup, slick interface and neat handset. It offers loads of on-demand content, arranged into a grid of channels that can be added to or removed from as you choose. Among them are BBC iPlayer, Sky's NowTV, Demand 5 and Netflix.

It's redolent of Boxee, only rather cooler, and with a need to provide credit card details during registration so that you pay for chargeable content. Now we have the LT's £100 bigger brother, the Roku 3. That's 'bigger' as in functionality; the two players are of similar size.

You're now given a choice of dual-band Wi-Fi or Ethernet, ensuring that all connection bases are covered. The Roku 3 also offers casual games; indeed, you're given Angry Birds Space. If the internal memory fills up with games and channels, you can now bolster it via a micro-SD card slot. To aid gameplay, the handset has been enhanced with motion-sensitivity and a pair of 'action' buttons.

The icing on the cake, though, is the remote's headphone socket. Plug in a pair (earbuds are supplied) and the TV sound mutes. You can then watch or play without disturbing others. This feature is also great if you're listening to music ('net radio, Rdio, etc are onboard), and the remote has a good range; only after moving ten metres from the unit did the sound start to break up.

Moving back to AV matters, the Roku 3 drops the LT's analogue AV output – connection is via HDMI only. It supports 1080p for when the device is used for local media playback via the integrated USB socket. To take advantage of this, you'll need the free downloadable 'USB Media Player' channel. It's compatible with MKV, MP4 and FLV, although MPEG-2 files are ignored (presumably for licensing reasons). Oddly, open-source XviD (and DivX) video is also a no-go.

Not on your network

The Roku still lacks a DLNA client for playback of locally networked multimedia. At the time of writing, I couldn't even find a paid-for channel – although proprietary ones (such as Plex, which requires a program to be installed on your PC, and Synology's NAS-centric DSVideo) are available gratis. But there's still plenty to get your teeth into; as it stands, Roku features 450+ easily navigable channels.

In picture and sound quality terms, the potential is there; BBC iPlayer was, in HD, just as good as you can expect from a decent Smart TV. A 1080p MKV file, played via USB, looked great. The caveat is that the device, being of US origin, only supports 30/60Hz refresh rates. As a result, motion judder can spoil UK-sourced (25/50Hz) material. It's not too obtrusive, but adding manual refresh-rate selection to the Display Type menu (which currently only gives you 720p/1080p resolution options) would be welcome.

The Roku 3 offers a lot. In use it's absolutely foolproof, the content on offer is good and it's small enough to plug into any TV without upsetting your feng shui. And the new features make it an obvious upgrade on the LT.