Hi hope this works, make sure is up to date latest version.
1. Set up Home Sharing on all devices ( if they are authorized.)
2. Verify system requirements
3. Check your Apple ID
4. Check your network connection
5. Check Firewall Settings
6. Quit and reopen apps and iTunes
7. Restart your network router
8. Cannot access my library when my computer is asleep
Hope everyone posting is putting in calls to Apple Support, going to their local (if one exists) Apple Store and speaking politely with a Genius, who won't be able to fix this, but I'm sure logs issues that are reported directly back to Apple HQ.
It is obvious now that this is a major bug in iOS 6.0 and/or iTunes 10.7 and I'm sure the issue is on the radar screen for the next iTunes and/or iOS update. However, I don't think it has gotten the attention that the Maps app misstep has gained; arguably it's not as important for some people. For me, I use the TomTom GPS iOS app, so Maps wasn't that big an issue to me (even though it is a big issue).
But take away my ability to walk around the house with my iPhone 4 and earbuds engaged and not be able to stream all my iTunes library or lie in bed listening to music or podcasts as I fall asleep? FOWL! As a leading international leader said recently, Apple "crossed the red line" on this one.
Stay on 'em, people! This is an issue that Apple is going to have to resolve, not the customers.
I have finally cracked my problem. Homeshare photos on WinXP iTunes 10.7 definitely works with ATV restored using this file: "AppleTV2,1_5.0.2_9B830_Restore.ipsw".
It definitely DOES NOT work with the update which was applied two weeks ago. Sorry I did not take a note of the version number, but if it is dated a week or more ago it is rubbish.
The restore procedure fails on a PC which has other USB devices connected (I didn't try to find which).
You have to hold down the shift key when clicking Restore in order to use the file you downloaded, otherwise you just get the latest version from Apple.