Quicktime Pro v iMovie
I had the same question and ended up buying QTP for just one function - the ability to loop video.
I created a video in iMovie and exported it to AppleTV, with the intent of having it playing soundlessly in the background at parties. However, ATV has no way to make it loop.
But you can import your video into QTP, do view>loop then hit save, re-export to ATV and bingo, a continuous loop.
Now I've spent the $29.99, maybe I'll find other uses for QTP but don't spend the money for converting between formats - freeware like VisualHub, Handbrake, Mac the Ripper etc all do that very well, and for free.
SM