Do I need to be connected to the internet for the Smartbox/Media Streamer to work?

No. The Smartbox/Media Streamer is its own WiFi access point that other WiFi devices can see and connect to.  Similar to connecting to the WiFi in your home or at work.  You can then "surf" the contents of the memory card or USB drive attached to the Smartbox/Media Streamer device to stream movies, pictures, music, as well as view documents stored on the flash drive.

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