That’s the latest rumor from the high-tech grapevine. While no one will go on record, the usual “knowledgeable sources” are whispering that Apple is on the verge of striking a movie-download deal for its iTunes Music Store.

Of course, Steve Jobs is hardly a stranger to Tinsel Town. It was back in 1986 when Apple’s co-founder purchased an outfit called the “Graphics Group” from George Lucas and renamed it Pixar. And even though Disney officially acquired Pixar earlier this year, Jobs remains an influence, emerging as Disney’s largest individual stockholder and occupying a seat on the Mouse’s board of directors.

So rumors of Jobs & Company hitting up major studios for feature film download rights carry a little more weight than your average gossip mill chatter. Especially with the Apple Expo kicking off in France on September 12th.

On that day, Apple is supposed to announce a movie/iTunes/iPod deal during a “special media event” in San Francisco.

As with all good rumors, no one is talking. At least not officially. However, there are plenty of “undisclosed sources” and “anonymous” studio execs who are more than happy to talk about it – as long as they remain unidentified.

The gist is that Apple has been talking to several studios. But while some studios are definitely in favor of an iTunes presence, others have yet to hurdle disagreements with Apple. Supposedly, one disagreement centers on Apple’s one-price-fits-all policy, while another issue is whether films should be released on iTunes the same day the movies are released on DVD.

Then there’s the copy protection dilemma. Many studios already have download agreements with other online movie stores, yet Apple might seek a different copy protection agreement than what is in place. Since Apple has strived for uniformity on iTunes with all songs carrying the same copy limitations, the computer company may not be all that accommodating to studios wanting to keep a tighter rein on their products.

Furthermore, Microsoft’s upcoming digital player, Zune, also handles video. And, as we all know, Microsoft has its own digital rights management system.

But will movie fans cotton to watching flicks on their iPods? Will “Jaws,” “Titanic” or even “Snakes On A Plane” appear as dynamic on iPod’s postage-size screens as in movie houses? Although Apple is expected to introduce a new, wide-screen iPod in the coming months, there are indications that folks aren’t all that worked up about seeing full-length feature films on something that can fit in the palm of one’s hand.

A recent Associated Press / AOL survey reported that only one in five online video viewers has watched or downloaded a full-length movie or TV show. What’s more, only 7 percent of current Internet video watchers have actually purchased video online. Clearly not a good sign of things to come.

However, that’s not to say Internet surfers don’t watch video. The same survey said that more than half of Internet users watch or download video in the form of news clips, music videos and user-generated fare.

But while the average Internet user’s video attention span seems to be concurrent with the maximum length of clips found on YouTube, the expectation is that the time consumers are willing to spend viewing clips on tiny screens will increase as more user-friendly video-viewing devices become available.

No one is predicting a future where movies will not be available on the Net. Instead, it’s disagreements on profit margins, distribution control and copy protection that’s keeping Hollywood from venturing deeper into the digital downloading waters.

An Apple deal, or perhaps a downloading agreement with another high-profile company like Amazon, which is also pursuing its own agreement with Hollywood, would surely transfer movie downloading from the niche market it currently occupies into the mainstream.

But almost all of this is conjecture, because Apple has yet to comment on reports that it’s about to enter the movie download biz. However, all will be revealed on September 12th. At least that’s what the rumors say.