Ever since the Internet entered the popular culture, futurists and technophiles have been telling the world that the new medium would transform homes into information-rich hubs of activity. Refrigerators, they predicted, would someday monitor the expiration dates on milk cartons. The family room would double as a videoconferencing theater. The toaster and the microwave would engage in endless Socratic debate.

Three or four years on, none of this has happened, and some of it may never happen, since consumers are likely to see many gee-whiz applications as more trouble than they are worth. Yet home networking is far from dead: in the past three years, the underlying technology has undergone its own quiet revolution. Big interests are at stake, and companies such as Intel, Microsoft, and 3Com have been diligently working out the bugs; others, including Cisco, Ericsson, and Pace, have been testing the new technology in homes to see how consumers react.

Such companies have found that although talking toasters may remain a fantasy, people would even now be willing to use more prosaic applications that make it possible for them to communicate more easily, to find a broader range of entertainment options, and to assume greater control...