Videos over Home Sharing keep dropping for me. Didn't have this issue at all before updating to 5.1.1 and iTunes 11. Video just stops playing randomly and the Apple TV goes back to the home screen. Going back in, the video will resume from where it left off.
I have this problem too. But I've only upgraded iTunes to 11. I haven't upgraded my Apple TV2. (it's jailbroken, so I likely won't upgrade it).
My symptom: Now when I stream a movie or show from my iTunes Library via Home sharing, the show plays, but I will get intermittent pixelation or the image on the screen will freeze for ~5 seconds or longer while the audio continues, OR the program will just drop out, with a "there was an error loading this content" message on the ATV2. I can stop and resume the program, but the same pixelation/freezing issues will occur at the same times as before. This problem did not occur before I updated to iTunes 11, and first occurred immediately after I upgraded, and has been consistent (and annoying) since then.
Workaround: it seems that this problem is unique to Homesharing. If I instead use Airplay in iTunes on my mac to send the show/movie to my Apple TV, I do not experience the symptom. This is fine, but inconvenient since I now have to go sit at my computer to launch a show instead of sitting on the couch.
Worry: I wonder if the Apple TV update is required to quell this symptom. That would be bad because I use the jailbroken features on my ATV2 a lot and so I don't want to upgrade to the latest ATV firmware and lose my jailbreak, just to get back functionality I already had before the iTunes 11 update broke it.