I strongly recommend we all move to following thread and bring in others as we find them:
https://discussions.apple.com/message/25507932#25507932
Just to update anyone just joining:
The issue appears to have started yesterday for most of us and a day earlier for some but definitly this week. It appears to affect ATV generation 1 and as of this moment is still affecting my ATV generation 1. We are still waiting to hear from ATV generation 2 and 3 owners.
Apple has not recognized this issue as per at least two reports from users that were able to get phone support.
IrvBd has an ATV generation 3 and the issue seems to have been resolved for him.
Restart/Restore/rebuild/different computer/ does not resolve the issue.
Disconnecting the ATV from Internet access resolves the play back stuttering from content on the ATV hard drive and sluggish remote response BUT of course will stop you from having Internet access.
Connected to the Internet (via WIFI or Ethernet) or disconnected from the Internet, you still cannot connect to the iTunes Store. It seems we are being blocked somehow. Every continent except the North and South poles have checked in with the same problem.
Connected directly to your computer via Ethernet while disconnected from the Internet will allow your ATV to communicate with your iTunes application and will stream your content to your ATV.
Bottom line: Any attempt your ATV makes to get online (connect through the Internet to the iTunes Store) degrades play back, degrades remote control response, and disconnects your iTunes content from your ATV making the content on the ATV hard drive the only content accessible.