That’s the case with whatever Apple (AAPL) might be cooking up for television. It’s obviously doing something, but nobody can quite tell what it is. Steve Jobs has publicly stated the company’s desire to “tear up the set-top box” and create something novel — which is what Apple does in all of the markets it succeeds in. And though reports that Apple is working on a major TV project are sketchy on details, there are enough such reports to make it obvious that the company has a specific plan of some kind, apparently involving Apple-branded television sets.

That’s where the speculation comes in. Not only would such a move entail Apple expanding beyond computing devices into the entrenched world of consumer electronics, it also would involve reaching agreements with media companies that are increasingly worried about losing control of their movies and TV shows.

To “win the living room, Apple will need an innovation comparable to that of its iPhone—something that changes TV sets in a fundamental way,” argues media strategist Ben Kunz in a column for BusinessWeek.

Kunz seems to think 3D TV will be that innovation. That seems unlikely, though. At the movie theater, 3D appears to be mostly a fad. Kunz notes that Apple has registered a patent for a new kind of 3D technology that doesn’t require special glasses and also allows multiple people to watch from different positions. But the existence of a patent isn’t tantamount to ready-for-market technology. And in any case, while 3D might well be a feature of an Apple TV product — maybe even a major one — it wouldn’t make the product a world-changer like the iPad.

VentureBeat’s Devindra Hardawar has a more down-to-earth theory, one that rejects the idea that Apple would have to create a new kind of television altogether: Apple, he thinks, might be aiming squarely at the small-set market, which would mean leaving the living room to others and concentrating on dorm rooms, bedrooms, and kitchens. He makes a good argument: Competing with the likes of Samsung and Sony on large sets would be a major challenge (though of course Apple could partner with one of them). And people would be more likely to replace smaller TVs more often, which would hew to Apple’s usual strategy of creating short product cycles. Hardawar’s argument that making big TVs would cannibalize the company’s current Apple TV product doesn’t really wash — if Apple can take over the living room, it would gladly dispense with a product that Steve Jobs has referred to as a “hobby.”

But simply making smaller sets doesn’t really square with Apple’s apparent wish to be  a major player in the TV market, and you don’t do that without taking on the living room.

Apple could simply be putting together a whole TV package all at once, with an eye toward introducing a suite of smart, well-designed television sets along with access, via the iOS interface used on iPads and other devices, to Apple-brokered content. That would be similar to what Apple did with music and the iPod. With the iOS running on Apple’s televisions, the company could sell a lot of TVs simply by comparing its interface with the clunky, often infuriating interfaces offered by moribund cable providers. That is, if Apple offered access to enough content to skirt the cable providers.

The iPod wasn’t the first MP3 player, nor even necessarily the best. But Apple succeeded with it largely because it also had lots and lots of music to sell cheaply and an interface that made it easy to buy. The situation is different with the studios, which are in a far better negotiating position than the music labels were. And unlike with music when the iPod was introduced, Apple would face a lot of competition for video from the likes of Hulu, Netflix (NFLX), Amazon (AMZN), Google (GOOG) and others. If Apple can’t provide a wide range of easily accessible, reasonably priced video content, it will be hard pressed to give mass audiences a reason to buy its TVs, however beautiful they might be.