HP Tuesday revealed improvements to its telepresence technology that make high-quality videoconferencing more accessible to business customers.

The upgrades to HP’s Halo line include a less-elaborate system that still produces high-definition images but at $100,000 less than the high-end model. After receiving customer feedback, HP also changed the product so a third party can join a telepresence meeting even if he is only on a conventional video system or calling by phone.

The addition of new systems and features helps HP compete in a niche, but quickly growing, market for systems that make it seem as though people on each end of a videoconference are in the same room.

Telepresence system revenue, which was $64 million in 2006, will jump to $169 million in 2007 and top the $1 billion mark by 2011, according to an IDC estimate.

Click to see: HP Halo upgrades

HP introduced Halo in December 2005. The system calls for a $349,000 telepresence studio at one location and another $349,000 studio elsewhere that looks like a mirror image of the first. A proprietary network for sending the video signal is $18,000 per month, per studio.

The more modest version HP unveiled this week provides high-quality video but makes it work in existing offices or conference rooms, rather than a specially made studio, for $249,000 per system.

Participants in a telepresence meeting are often taken aback by the clarity of the image from a room thousands of miles away, fed to them at 45Mbps vs. about 1Mbps on a conventional system, says Bill Wickes, director of research and development for the Halo program at HP.

“I’ve seen it happen a million times by now, but people, when they first come into the room, they are startled by how realistic it is,” Wickes says.

As impressive as the systems may be, demand for them is driven by more practical concerns about the time, expense, hassles and hazards of business travel.

“I call it the corporate jet replacement market,” says Nora Freedman, an analyst with IDC, who adds that telepresence reduces a company’s carbon footprint because forgoing air travel means fewer greenhouse gas emissions.

HP and Cisco have each introduced telepresence systems, but existing makers of conventional videoconferencing systems have a head start, says Freedman. Polycom and Teliris also offer high-definition systems that deliver a sharper image than older systems but are less expensive than the telepresence systems.