ATV 1 acts sort of like an iPod. You sync it to iTunes (on PC or Mac) rather than streaming everything as you would on ATV2 or 3.
If the ATV is on the same network as your PC, it should show up in iTunes as a device. Sorry, I haven't done this for about 3 years, so I don't remember it very well, but I believe that on the ATV side, you should see a confirmation code that you need to enter into iTunes to authorize the sync. You should only have to do that once.
You may have to go into the settings menu on the ATV to tell it that you want to sync to a new iTunes library. I believe that is going to erase anything that is currently stored on the ATV, so make sure you really want to sync to your library.