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By the way, other than have the :apple:TV drop off iTunes on the rare occasion (simply restart iTunes to correct and haven't has an incidents since latest iTunes/OS X updates)

So where is your library stored? On a computer or server that is always on, in addition to all these components?

Can Apple TV see content on a remote hard drive, say a NAS drive served off an Airport Extreme, or is it reliant upon iTunes running on a computer someplace?
 
...My understanding remains that ATV only works flawlessly if accessing media directly from its internal hard drive. That media streamed from anywhere else will result in problems. And that the only way to add external storage to ATV that it recognizes as its own 'internal' is through a 'hack.' How, precisely?

Actually, ideally, since I have one, I would prefer ATV to recognize media on a Time Capsule as its own, and use it via wi-fi as flawlessly as it does that on its internal hard drive.
I have an original 40GB Apple TV and after the latest software update (v3.x) I decided to try streaming from an old G4 Mac mini with all of my media stored on a USB hard drive attached to the mini. Interestingly, I found that the Apple TV's media playback was actually smoother with the content streamed from the Mac mini rather than stored directly on the Apple TV's hard drive. I think this is because the Apple TV's internal hard drive is used as a backing store (paging) for the Apple TV operating system and periodically the access to the content stored on the internal hard drive is interrupted by paging operations by the OS. The latter can cause hiccups in the media playback, particularly when navigating the UI. In fact, I have heard a few very minor pauses in the playback even when the UI is idle (attributed, I think, to background hard drive activity by the Apple TV OS). In any case, when the media is streamed over the network there seems to be fewer hiccups in the playback (as rare as they are). Of course, if you have a slow network you're going to see longer delays in some operations. But at least in my case these delays are short and the media continues to play smoothly while the network responds.

I think the ideal case would be to have the internal hard drive devoted to the operating system with the media stored on a second drive directly attached to the Apple TV. Of course, Apple doesn't enable that type of setup. I don't know the reason for that, but I suspect it has something to do with the movie studio's objections to having content stored on an external drive that could be easily moved to a PC/Mac (it's basically a copy protection, DRM issue).
 
I'm thinking about getting a Roku box

Streams HD movies, 3rd party channel providers, cheap, easy to use.

I feel like Apple used the ATV as a big beta test and STILL haven't committed to it 100%
 
I hacked my a-TV with ATVFlash, and am now using the 1 TB Toshiba external drive as my external storage. Quite enough for my movies.

I bought this piece of hardware for 2 reasons:

(1) to watch a few selected shows as soon as they come out in the US legally, using my US iTunes account here in Europe.

(2) for my 3 kids to endlessly replay their cartoons. I hate the modern cartoon networks with a passion, and only show my kids good movies and cartoons (e.g. Miyazaki, good Disney, etc.). Even my 1-year old knows how to use the ATV remote to watch her favourite dancing flicks.

With the DVD's constantly being scratched and made gooey with stuff the origins of which I don't want to know... ATV seems a good alternative.
 
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