The next iteration of Sony's DVDirect--the VRD-MC5--is already on its way, even though we just recently reviewed the VRD-MC3. The new version adds some features and loses some, but in the end, it's ultimately a gain.
Unlike the VRD-MC3, the VRD-MC5 doesn't work as a PC-attached burner. In researching how people were using the product, Sony noted that PC-attached burning fell to the back of the list. After all, the VRD-MC3's burn speeds couldn't compete with those of standalone burners, as verified by CNET Labs' tests. But it does add support for AVCHD videos. The VRD-MC5 can transfer AVCHD videos to DVD discs in 1080i resolution, and the resulting discs can be played back on compatible Blu-ray players and computer drives. PS3's can also be used to play back the discs.
Aside from these two major changes, the VRD-MC5 offers most of the same features as its predecessor: DV, S-Video, and composite video inputs, as well as a single USB port for Sony hard drive, DVD, and Memory Stick Handycam camcorders (the previous model offered two USB ports). Minor improvements include the ability to import your own JPEG images to serve as DVD menu backgrounds and the ability to import MP3 music files to accompany slide shows (you can still choose one of the cheesy, Muzak-like songs Sony's preinstalled on the drive).
The VRD-MC5 will be available in August for $230, $20 less than the VRD-MC3.