I hacked the Apple TV by purchasing the program from ATVFLASH.

Once you unlock the ATV, there is no stopping you.  I have a time capsule router hooked up to the cable in my home theatre stack.  The ATV is hooked up via ethernet to the time capsule.  I have port forwarding to another computer in the house that I use to download whatever I want to the USB drive hooked up to the time capsule. The USB drive is 1TB.

So, it works like this:

The ATV streams movies from the shared USB drive.
The pictures from my itunes are also synced to the ATV.... they are my screen saver.

I have a Logitech 720...