You have to pull the drive, connect it to your Mac, then use Disk Utility to restore the downloaded DMG to the OSBoot partition. I have a few posts in this forum describing the process in detail.
actually i figured it out myself due to my impatience.
i downloaded the 2.2 dmg here http://www.iclarified.com/entry/comments.php?enid=970. and on my apple tv, i initiated a download for the latest update (2.3). after it was done downloading, i accessed the files via ssh and went to the newly created 'updates' folder. i uploaded my 2.2 dmg file to the folder, and renamed the 2.2 dmg file to whatever they named the freshly downloaded 2.3 dmg file.
thennn i went to my apple tv, clicked on 'confirm update' or 'start update' or whatever. it updated to 2.2 instead of 2.3.
pretty easy, and no need to "pull the drive and connect it to your mac," or whatever difficult process you referred to.
If patchsticking to get ssh works for you, then that's great. Even better if you can turn on AFP. But pulling the ATV's drive is a piece of cake - 3 minutes, tops.