JohnDuncan:Couldn't for the life of me get composite out to work (which meant I could never plug it in to my SD telly, except in black and white, or green, or blue...).
Well, that's a hardware thing: There's no composite out on the Apple TV....
Some people claim to get colours through the green component outlet (by plugging a DVI-to-HDMI adaptor to the ATV), but that's a magic trick that has nothing to do with aTV Flash.
The "add Mac apps" claim worked with Firefox and...that's it.
Haven't tried to install anything that's not part of the aTV Flash installer. The Apple TV doesn't have processor power to run real apps anyway; nor a keyboard to control them.
I struggled badly with connecting to network drives (but that could just be networking for you).
I use a WD ShareSpace (that holds my iTunes library) connected via a 3Com GigaBit switch to an AirPort Extreme. Works perfectly, whether it's wired or wireless.
Getting a burned DVD onto it was not for the faint-hearted.
Haven't tried that yet. I think you'll have to use FTP to transfer files that's not imported to iTunes.
I never dared try to connect a USB drive to it because you had to make the external drive its "main" storage, and I got the impression it was going to empty it, or the @TV drive, or both.
You can choose which HDD (Apple TV internal or USB) to be the main one (containing the software). I guess choosing the external one might mean it will have to be reformatted. Adding a USB drive for extra storage seems simple enough though.