Advice on recommended (most stable) setup for Apple TV

ATV is doing my head in at the moment as it seems to be more flaky than ever before. So, I was wondering if people could comment on how I've got this setup and see if they'd do anything differently? I've just done a full restore on it and its just updating to the latest software at the moment.

So, thoughts and opinions would be much appreciated as it really is driving me mad with the constant Apple logo, stuttering video, blank menus, lack of response to the remote etc....

ATV is downstairs
ATV is connecting to an Onkyo amp via HDMI for audio & video
There's an AEBS beside the ATV
ATV connects to the AEBS via wireless
AEBS has a wireless n 2.4GHz network defined on it

iMac housing the iTunes library is upstairs
There's a Time Capsule beside it which is extending the network from the AEBS on the ground floor

Distance between devices on the different floors is 5 metres or so, but I can't run a patch cable from upstairs to downstairs.

I've turned the Time Capsule off just now, so everything is connecting via wireless to the AEBS on the ground floor.

So, would anyone with some experience of ATV care to give me some pointers on how best to set this all up to get the most out of ATV?

Thanks

I used to have it connected via Ethernet as that's the logical choice, but I was still having problems, so thought I'd just go all-out wireless for starters.

Having just done all of this, its taken about 2 minutes to cue up a film (badly) from pressing select. I'm starting to think this just isn't going to work for me.

As for the HDMI switching, I think its less of an issue since the latest updates. It used to be the case that if you got the Apple logo up, a reboot would be the only way to recover it. But now it does seem to get back to something approaching the main menu, although sometimes there's no menu options within the menu. Progress? Kind of...

Still trying to get this thing working reliably!

Content stored on the ATV seems to be OK in the main, so its definitely streaming that's giving me grief. I've now got the following setup.

Ground floor:

Netegar ADSL router/modem <--> AEBS <--> Apple TV
All wired connections.

First floor:

iMac connecting wirelessly to the AEBS downstairs.

I'm running wireless N in 5Ghz mode. Have tried increasing and decreasing the multicast rate. Its a new-bulid house, so the walls/floors shouldn't be an issue and the distance between the base station and the iMac isn't that huge even though they're on different floors. I've just tried raising the AEBS on to a shelf so the distance to the AEBS from the iMac is even shorter now.

This is just doing my head in. I really don't see why its proving to be so difficult to get smooth streaming from the iMac down to the Apple TV.

Any ideas?