Apple has just released a minor software update for Apple TV 2 and Apple TV 3. Apple TV 5.0.1 (9B206f) adds HD previews for TV shows and movies in the iTunes store and brings fixes to Netflix, AirPlay and Home Sharing.
I ask you the problem with the Apple TV, you (may) say the lack of playable video types. With Air Video, a great iPhone and iPad app, your Apple TV will be playing all of your video files (without conversion) in no time.
The app can stream video from your computer to your iPhone or iPad, which can then be streamed to your Apple TV in the new 4.3 firmware. Currently a beta version of the video server is required (or else only audio will stream through AirPlay). This beta is available for download on InMethod’s website. After you select the folders which you would like Air Video to watch, all videos within are accessible on the Air Video app on both the iPhone and iPad (the app is universal).