Apple’s new dual-core, 1GHz A5 chip will be making it’s debut in the iPad 2 in just a few days, and, as advertised in the keynote by Steve Jobs, the new chip will handle 1080p content with ease.  The new iPad outputs HD display via an HDMI adapter and cable.  So will another Apple device.

The current Apple TV runs Apple’s soon-to-be outdated A4 chip, which only handles 720p content, one of the device’s only weaknesses.  When the Apple TV undergoes an update later this year, most likely in September, we’ll most likely see it pack Apple’s new A5 chip, which will handle 1080p video with ease.

It will be interesting to see if AirPlay can handle 1080P as well.