You need to have iTunes running on something. It won't run on a TC. There are ways to partition the TC drive to accomplish storage. I prefer to just attach a network drive to it. Easier and not very expensiveHi,
The Apple TV won't store your movies, so you need to use something that it will stream from (i.e. a desktop). Can you use apple's time capsule to store rips of dvd's and then play them from the apple tv?
I don't see why not. Before adding a Mac Mini to my setup, I was doing this but with an external HD connected to the TC via USB.It is possible to mount the TC as a network share on the Mac running iTunes. It won't be as reliable as a hard drive hanging off the Mac directly but it should work to as a mount point. You'll tell iTunes your media collection is located on the TC. Just keep in mind you can't backup files on the TC to the TC.