Earlier this year at the D conference… by the fountain at sunset.

Steve Jobs: “Hey Jason… I love Engadget, I read it every day.”

Jason: “Wow… that’s great. Why do you read it?”

Steve: “Competitive intelligence… you guys get stuff before anyone.”

Jason: “Neat! So, hey… I have a questions for you. Why wouldn’t you make a video iPod?”

Steve Jobs: “People don’t want to watch video on their iPod.”

Jason: “Really? We hacked the iPod to do video and people went nuts for it. I’m your customer and I’m telling you I would pay $100 more for a video iPod!”

Steve Jobs: “The iPod is for listening to music. It’s not designed for video.” Smiles wryly.

Jason (to self): “Either this guys a great liar or he’s a fool-and I know Steve Jobs is nobody’s fool.”

Was listening to the Daily Source Code (#255) and Adam Curry got a similar response when he asked Jobs about a video iPod.

Today we know the truth: