This is what I do to get 1280x720p at 30fps, the best you can get on ATV...
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Capture & Edit 1920x1080i in FCP or other...
Open MPEG Streamclip (free)
Settings: Export to Quicktime
Compression: H.264
Quality: 100%
Limit Data Rate: 5,000 Kbps
Sound: MPEG-4 AAC
Frame Size: 1280x720 (HDTV 720p)
Frame Rate: 29.97
Better Downscaling
Deselect for progressive movies: deselect ALL
Upper Field First
Make Movie
Save Your Movie
Creating a 'blank' movie
* Create an image of solid black, 100 x 100 pixels and import it into
Quicktime Player using the open image sequence command with a
duration of 1 second.
* Record silence into Quicktime Player by disconnecting the microphone.
* Combine these two into one movie.
* Export this movie into a .mov file using H.264 video and AAC audio. It
should be a second long or less.
* Lock this file in the Finder so you don't write over it by accident.
Use the blank movie to create syncable files
* Open the blank movie.
* Open your video.
* In your video select all and copy.
* Switch to the blank movie.
* Push playhead to the end of 1sec.
* Select 'Add to Movie' from the edit menu.
* Optional: Open the "Movie Properties" window, select the blank video
track, and alter its scaled size to match the main video track.
* Save a copy of this movie, self contained, to your hard drive.
* Import the movie into iTunes.
* Change the title or other tags as appropriate.
* Sync with your Apple TV (Streaming will work too).
Apple TV will be fooled into thinking the movie is NTSC but it will be at the
best resolution you can get out of Apple TV.