Do you think that the 3 inches cable (http://www.cpustuff.com/22-pin-male...-data-sata-adapter-custom-cable-3-inches.html) will fit better?
Yup, exactly how I connected it and yes Cave Man those are the only parts I bought besides the HD. It worked from the very first time I plugged in everything. No yellow light or anything, loving this set up BTW, it seems like the ATV is actually running much faster with the new hard drive even though it's a 5400 RPM Western Digital HD. This is the hard drive I purchased as well that I bought from newegg.com; Western Digital Scorpio Blue WD7500BPVT.