Currently Being ModeratedDec 4, 2012 12:30 PM (in response to cheekyage)
Use the Ken Burns effect viewing the photos as a slideshow. Not perfect but most photos will be zoomed in to full screen and the Ken Burns effect is a nice way to add "motion" to your still photos.
If the 16:9 format is important to you set your camera to this format if possible. It will be a feature I look for on my next camera.
Many thanks for your informative replies guys.
What I still can't work out is when I use the exact same photos not via Apple TV on a Samsung smart TV they look amazing and in full screen.
Could it just be the way iPhoto is setup with Apple TV?