Okay I have an update, this was weird.
Now note when I last posted a couple of weeks ago this was absolutely reliably failing every time. I'd restarted my computer, restarted itunes, restarted my cable router and restarted my wireless router, and I'd done those restarts in various orders. There was nothing I could do to make Homesharing work for more than 4-5 minutes.
Just the other day, and I had not updated ANY software/firmware or anything, I thought I'd just try it out. I'd noticed there was an iTunes update available and I thought I should re-test it before updating. So I watched Avatar homeshared from iTunes on my windows 7 box to my aTV. Without ANY problems - nearly 3 hours long and not one homesharing dropout.
And I have not changed ANYTHING in my setup since it was failing so badly a couple of weeks back.
This leads me to believe this whole debacle is down to something on the Apple servers that iTunes communicates with.
Sadly I have since downloaded the new iTunes and tried to watch something and it took me about 1/2 hour of faffing about restarting everything before I could get anything to stream at all, and that was only using the remote play on iTunes and airplay to ATV. So back to where I was before, except now I'm doubtful it was the iTunes update itself, I'm fairly convinced the problem is at the Apple server farm.
And I must say I'm getting pretty annoyed now. Basically the ATV is not doing what it was sold to do, easy home sharing. And if it doesn't start working soon I'm going to be going down a non apple route for this facility and that makes it more likely I'll shift right out of the Apple ecosystem.
And yes I have sent feedback to Apple about this issue, more than once, and I've pointed them to this thread.
I think the problem is Apple TV is a, what did they say 'hobby' to them, so they obviously don't give a flying fig about us. It was only £100...
I really shouldn't be expected to muck about with router settings, I might need IPv6 for something (sooner or later we all will). Especially considering sometimes it works...