So it took me two days to pwn the apple TV but I finally have a jail broken apple tv running ios 4.3 and XBMC. Basically I now have netflix, nba, mlb AND all of my videos that can be accessed natively from the ATV.
At the time of this post pwnage tool 4.3 for the mac breaks XMBC, you will get an error “could not initialize audio device”
Instead use Seas0nPass from Firecore to jail break the ATV and create the custom ipsw file.
Another thing I ran into was issues getting into DFU mode. I had to follow these steps
Plug USB into the mac
Plug the power in
Hold Down the down button and menu for 6 seconds to reboot
release after 6 seconds
Hold menu and play for 7 seconds
release after 7 seconds
**** After you enter DFU mode then UNPLUG the power from the ATV ***
I had to do this or else i would get an error from itunes saying this Apple TV could not be restored
I used the pwnage tool to be sure I was in DFU mode, it will tell you when you have successfully entered DFU mode.
Then you have to follow these instructions to install xbmc
Then you can add your video sources and start watching those avi files. SMB shares are supported and so are NAS devices using uPNP. My iomega ix200 was discovered automatically and my file shares were easily added to XBMC. MKV files crash XBMC, not sure why. But HD quality avi files are fine.