The stock dropped sharply yesterday during and after the event, held in San Francisco, rebounding modestly today.

The Street’s reaction to the announcements was largely mixed. Expectations heading into Apple (AAPL) product launches are often far beyond the rational; almost all of yesterday’s product news had already leaked into the rumor mill.

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9:56 A.M. (PDT)
The Apple store is down in anticipation of today’s event–always a good sign at an Apple affair. Inside the theater, there’s little decoration aside from the white Apple logo onstage.

10:00 A.M.
Lights dim. And it’s showtime! Jobs takes the stage; not looking like he’s won any competitive eating contests lately, he offers up the obligatory “reports of My Death Have Been Greatly Exaggerated” joke and then quickly moves on to the topic of the day: music.

10:02 A.M.
Jobs notes that there are now 65 million iTunes accounts with credit cards and that iTunes is the number one music distributor in the world.

“We’re adding something to iTunes today,” says Jobs. The first addition: HDTV shows. The second…wait for it: NBC is coming back to iTunes and bringing all its shows with them. And in HD.

10:10 A.M.
Jobs announces iTunes 8 and as expected, it includes HD support, an iPhoto-style browsing feature and the rumored “Genius” feature, which automatically creates playlists from songs in users’ iTunes libraries. Genius is an opt-in service. It collects media preferences from all participating iTunes users and algorithmically analyzes them to generate “Genius” playlists. The more you participate, the smarter Genius gets, says Jobs. It works with movies and TV too.

Jobs gives the audience a quick demonstration of the Genius feature and moves on to the iPod. He notes that the iPod has a 73.4 percent market share in the U.S. and that 90 percent of all cars in the U.S. offer iPod integration. Cumulative sales of the iPod since it was first announced are over 160 million.

10:15 A.M.
First iPod announcement: The 80GB iPod Classic has been upgraded to 120GB at the same $229 price point. Second: The new iPod nano–it’s the vertical device that’s been rumored. Very slick. “It’s the thinnest iPod we’ve ever made,” says Jobs. It’s got a new curved aluminum design, enhanced user interface, an accelerometer to put images into landscape mode, built-in Genius support, 24-hour battery life for music or four hours for video and a “shake-to-shuffle” feature that does what you’d expect. Jobs shakes his nano to demonstrate as it shuffles to a Dean Martin song. “Uh-oh. Now you guys know I listen to Dean Martin.”

10:24 A.M.
The new nano is apparently far more environmentally friendly than its predecessors. Jobs says it is the cleanest, most toxin-free iPod Apple has ever built. It comes in eight colors, in 8GB and 16GB models, and they’re shipping today.

10:30 A.M.
Jobs announces two new pairs of Apple headphones. The first features a robust cable controller that allows users to control volume, etc. The second is a better set of in-ear headphones. He quickly moves on to Apple’s new iPod Touch. It’s similar to its predecessor, but thinner, and features a better speaker, a better UI, Genius-support and built-in Nike+iPod support. It also features App Store–100 million apps have been downloaded from the App Store in the two months since it was launched.

10:39 A.M.
After a quick demo of the iPod Touch, Jobs invites Phil Shiller to the stage to demonstrate some new games. First up: “Spore Origins,” which truly looks just incredible. “My creature has eyes … but no brain,” says Schiller. The game uses the device’s accelerometer to steer spore creatures through the universe as they eat and get eaten.

10:43 A.M.
The next demo: Gameloft;s Real Soccer 2009. With an instant-replay feature, it seems pretty robust. Last up: EA’s “Need for Speed.” Also quite impressive from a graphics and game-play standpoint.

10:45 A.M.
Jobs returns to the stage and notes that the new iPod Touch’s environmental footprint is similar to the Nano’s. It’s got great battery life, App Store support, tons of games, 8GB, 16GB and 32GB models and starts shipping today,” he notes, adding that “we think it’s the funnest iPod ever” before introducing Apple’s newest iPod Touch commercial.

10:47 A.M.
Jobs announces iPod Touch 2.1 and iPhone 2.1. iPhone 2.1 resolves a number of issues that have been troubling the device. Reception issues, dropped calls, overlong backups–2.1 should remedy all these things. “iPhone 2.1 is a big update,” he says. “It fixes lots of bugs. You’ll get fewer call drops. You will get significantly improved battery life, for most customers. We have fixed a lot of bugs where if you have a lot of apps on the phone, you’re not going to get some of the crashes and other things that we’ve seen. Backing up to iTunes is dramatically faster. And so just a lot of bugs have been fixed.”

iPod Touch 2.1 available today. iPhone 2.1 available Friday. “This is our strongest iPod line-up ever,” says Jobs as he does at every event like this. He then welcome’s Jack Johnson to the stage.

10:57 A.M.
Jobs returns to the stage to thank Johnson. Seeing the two onstage together, it’s hard not to think about how thin Jobs looks next to the singer. He certainly seems healthy, though.

And … one more thing?

Apparently not. “Go out and buy some of these great products. Thanks for coming.” And that’s it. Time to download “Spore” for iPhone, I guess.

For the record, Apple (AAPL) is trading lower today, as of this writing.

9:56 A.M. (PDT)
The Apple store is down in anticipation of today’s event–always a good sign at an Apple affair. Inside the theater, there’s little decoration aside from the white Apple logo onstage.

10:00 A.M.
Lights dim. And it’s showtime! Jobs takes the stage; not looking like he’s won any competitive eating contests lately, he offers up the obligatory “reports of My Death Have Been Greatly Exaggerated” joke and then quickly moves on to the topic of the day: music.

10:02 A.M.
Jobs notes that there are now 65 million iTunes accounts with credit cards and that iTunes is the number one music distributor in the world.

“We’re adding something to iTunes today,” says Jobs. The first addition: HDTV shows. The second…wait for it: NBC is coming back to iTunes and bringing all its shows with them. And in HD.

10:10 A.M.
Jobs announces iTunes 8 and as expected, it includes HD support, an iPhoto-style browsing feature and the rumored “Genius” feature, which automatically creates playlists from songs in users’ iTunes libraries. Genius is an opt-in service. It collects media preferences from all participating iTunes users and algorithmically analyzes them to generate “Genius” playlists. The more you participate, the smarter Genius gets, says Jobs. It works with movies and TV too.

Jobs gives the audience a quick demonstration of the Genius feature and moves on to the iPod. He notes that the iPod has a 73.4 percent market share in the U.S. and that 90 percent of all cars in the U.S. offer iPod integration. Cumulative sales of the iPod since it was first announced are over 160 million.

10:15 A.M.
First iPod announcement: The 80GB iPod Classic has been upgraded to 120GB at the same $229 price point. Second: The new iPod nano–it’s the vertical device that’s been rumored. Very slick. “It’s the thinnest iPod we’ve ever made,” says Jobs. It’s got a new curved aluminum design, enhanced user interface, an accelerometer to put images into landscape mode, built-in Genius support, 24-hour battery life for music or four hours for video and a “shake-to-shuffle” feature that does what you’d expect. Jobs shakes his nano to demonstrate as it shuffles to a Dean Martin song. “Uh-oh. Now you guys know I listen to Dean Martin.”

10:24 A.M.
The new nano is apparently far more environmentally friendly than its predecessors. Jobs says it is the cleanest, most toxin-free iPod Apple has ever built. It comes in eight colors, in 8GB and 16GB models, and they’re shipping today.

10:30 A.M.
Jobs announces two new pairs of Apple headphones. The first features a robust cable controller that allows users to control volume, etc. The second is a better set of in-ear headphones. He quickly moves on to Apple’s new iPod Touch. It’s similar to its predecessor, but thinner, and features a better speaker, a better UI, Genius-support and built-in Nike+iPod support. It also features App Store–100 million apps have been downloaded from the App Store in the two months since it was launched.

10:39 A.M.
After a quick demo of the iPod Touch, Jobs invites Phil Shiller to the stage to demonstrate some new games. First up: “Spore Origins,” which truly looks just incredible. “My creature has eyes … but no brain,” says Schiller. The game uses the device’s accelerometer to steer spore creatures through the universe as they eat and get eaten.

10:43 A.M.
The next demo: Gameloft;s Real Soccer 2009. With an instant-replay feature, it seems pretty robust. Last up: EA’s “Need for Speed.” Also quite impressive from a graphics and game-play standpoint.

10:45 A.M.
Jobs returns to the stage and notes that the new iPod Touch’s environmental footprint is similar to the Nano’s. It’s got great battery life, App Store support, tons of games, 8GB, 16GB and 32GB models and starts shipping today,” he notes, adding that “we think it’s the funnest iPod ever” before introducing Apple’s newest iPod Touch commercial.

10:47 A.M.
Jobs announces iPod Touch 2.1 and iPhone 2.1. iPhone 2.1 resolves a number of issues that have been troubling the device. Reception issues, dropped calls, overlong backups–2.1 should remedy all these things. “iPhone 2.1 is a big update,” he says. “It fixes lots of bugs. You’ll get fewer call drops. You will get significantly improved battery life, for most customers. We have fixed a lot of bugs where if you have a lot of apps on the phone, you’re not going to get some of the crashes and other things that we’ve seen. Backing up to iTunes is dramatically faster. And so just a lot of bugs have been fixed.”

iPod Touch 2.1 available today. iPhone 2.1 available Friday. “This is our strongest iPod line-up ever,” says Jobs as he does at every event like this. He then welcome’s Jack Johnson to the stage.

10:57 A.M.
Jobs returns to the stage to thank Johnson. Seeing the two onstage together, it’s hard not to think about how thin Jobs looks next to the singer. He certainly seems healthy, though.

And … one more thing?

Apparently not. “Go out and buy some of these great products. Thanks for coming.” And that’s it. Time to download “Spore” for iPhone, I guess.

For the record, Apple (AAPL) is trading lower today, as of this writing.

So it will be interesting to see what happens to AAPL when Jobs takes the stage to deliver the event keynote tomorrow. And he will be the one to deliver it. “We are confident that Steve Jobs will be presenting and we anticipate his appearance at the event to be viewed as a positive,” Piper Jaffray analyst Gene Munster said in a note to clients today. “While some investors are concerned that Jobs will not deliver the keynote, we have reason to believe he will. Therefore, we believe his health has improved since the June event, which would be a positive for the stock.”

[Image credit: iPhone Savior]

As usual before yet another big Apple event, the psychic friends network is in overdrive in anticipation of the iconic computer company’s “Let’s Rock” media gathering in San Francisco tomorrow.

At this point, I think Apple could announce a change in the color of its bathrooms at its Cupertino HQ and it would be mayhem among the Mac faithful.

Nonetheless, even though what will be announced is likely to be a series of incremental improvements for Apple’s line of music-playing products–iTunes, iTouch and, of course, the iPod–and even the possibility of a revamped design, it’s astonishing how striking the hype is around the event.

Of course, that kind of passion from core users is a blessing for any tech company, and it is hard to quibble with Apple’s stellar ability to market every jog and tittle of its product development as if it was the second coming.

But the most intense focus will more likely be on Apple’s leader, CEO Steve Jobs, whose gaunt appearance at the Worldwide Developers Conference in June set off a flurry of discussion about the exact state of his health.

That talk has since been less frantic, despite the fact that there actually has been no clear announcement from Apple (AAPL) on the delicate subject (and Jobs’s colorful off-the-record chat with the New York Times’s Joe Nocera does not count, folks).

In any case, because AllThingsD.com cannot resist either, Digital Daily’s John Paczkowski will be there liveblogging “Let’s Rock” from the Yerba Buena Center for the Arts, with all the news that’s fit to post.

And, of course, everything else too.

Wild cards, hmm? What sort of wild cards, exactly? According to Wu, “an advanced AppleTV with DVR and TV tuner capabilities” or “new touch form factors (iPod-Mac hybrid) with larger screens.” Perhaps even an iPhone 2.1 firmware update.

LIVE COVERAGE ALERT: Check back here Tuesday morning for live coverage of the event beginning at 10 AM P.S.T.

Wild cards, hmm? What sort of wild cards, exactly? According to Wu, “an advanced AppleTV with DVR and TV tuner capabilities” or “new touch form factors (iPod-Mac hybrid) with larger screens.” Perhaps even an iPhone 2.1 firmware update.

LIVE COVERAGE ALERT: Check back here Tuesday morning for live coverage of the event beginning at 10 AM P.S.T.

More interestingly though, Rose says that Apple will uncrate iTunes 8, the first major overhaul of the software since iTunes 7 launched two years ago. Rose claims that iTunes 8 will boast some significant enhancements, among them HD-quality TV show downloads, a new “grid view” browsing feature and a playlist recommendation engine called Genius. “iTunes 8 includes Genius, which makes playlists from songs in your library that go great together,” Rose writes. “Genius also includes Genius sidebar, which recommends music from the iTunes Store that you don’t already have.”

Notably absent from Rose’s list of new features: iTunes Unlimited–the $129-a-year all-you-can-eat subscription service that Apple has been rumored to be considering for some time now.

Like all such reports, Rose’s should be taken with a grain of salt, if not an entire salt lick. Rose was, after all, the guy who erroneously claimed Apple’s first iPhone would feature a slide-out keyboard, dual batteries and CDMA, and GSM support.