I've figured out a way to compress a 40 gig ATV disk image down to 487.5 mb, small enough to fit on a CD. Here's what I did. 1. Do a factory restore of the Apple TV. This deletes all the content on the hard drive. Unplug the ATV and pull its hard drive. 2. Connect the hard drive to a Mac by any number of means. I use a universal drive adapter that connects the drive by USB. Two partitions should mount: OSBoot and Media. 3. Launch Disk Utility. Click on the OSBoot partition and erase the free space using the one-pass zero write. This puts a zero on every unused byte of the partion. For OSBoot, it'll only take a couple of minutes. Next, do the same with Media partition. This will take about 30 minutes. At this point, all the unused bytes are now zeros. 4. Use the dd command in terminal to image your ATV's disk to your computer's internal hard drive. You'll need 38 gigs of free space (or about 150 gigs if you have a 160 gig ATV drive). The directions for this can be found here. A 40 gig drive takes about 2 hours by USB. A bit faster if it's Firewire. 5. Use Archive.app (right-click on the image icon and choose "Compress...") to compress the ATV drive image. Since you made all of the unused space on the hard drive zeros, Archive.app will be able to zip it more than 98% (37.26 gb down to 487.5 mb). This took about 2 hours on my 1.66 core duo mini. 6. When you need it, simply unzip it (make sure you have 40 gigs of hard drive space available!). It took about half an hour to unzip on my machine. Just let it run. 7. You can now use dd to put it back to a hard drive. If you put it on a drive larger than 40 gigs, you can use iPartition to increase Media's size to the hard drive you put the image on. This will also work with a 160 gig ATV, but it'll take longer to zero the Media partition, read the drive for imaging, and to compress/decompress it. However, I suspect you could still put the compressed image on a CD.