It is your fault for assuming that it would work. ATV uses HDCP so a simple HDMI to DVI cord is not going to work.
That said, this whole restocking fee BS needs to go away.
FYI
HDCP is a copy protection scheme that content providers demanded to provide HD content.
Currently, only a few devices use it.
My HD-DVD player did not require HDCP to decode HD-DVD's. However, it did require HDCP to upscale DVD's! When I first hooked it up to my old Sony I used the component inputs. The HD-DVD's worked fine but it wouldn't upscale the DVD's (a warning was posted before scaling to 480p). I then used the HDMI to DVI converter and I got the upscaling I wanted.
I know this is off topic but it explains why the original poster got his TV to work with most HDMI devices but not the ATV.
To the original poster, it doesn't hurt to try as it was an HONEST mistake.
I do not want to return my brand new AppleTV2.* My Sony HD TV supports 720 P (HDCP compliant), and better, but only has a DVI input.* The Apple Store employees sold me a Belkin HDMI to DVI cable and said that it should work, but I get a wobbly/waterfall effect with the picture.* I have made two calls to Apple Support and they both said that Apple does not support this connection and know of no plans to address this issue.
I have since emailed Steve Jobs, but gotten no response. If anyone finds a solution, please advise. Otherwise, I suggest that we all email Steve.