I have both a new ATV2 and a PS3 slim in my entertainment center which sits about 20 feet away from my Airport Extreme BaseStation and is visible through an open door in my office.
When I try and play Netflix movies on the ATV2, one of two things happen (we'll use Heroes season 3 as my example);
1) Roughly 5 - 10 minutes into the episode, the sound will completely cut out, yet the video will play along happily.
2) Roughly 10 minutes into an episode the video will freeze. End of story 😟
Only if I restart the ATV2 am I able to continue watching the episodes from the ATV2 from where it froze. In most cases, the sound or video will drop out again after another 5 - 10 minutes. Almost like clockwork.
Now underneath the ATV2 - two shelves down in my entertainment center - is my PS3 which has a slower network card in it than the ATV2 (A 802.11g versus the ATV2's 802.11n). Every time I have had a freeze on the ATV2, I switch over to the PS3 and can watch that episode, or anything without ever having an audio or video issue.
This tells me two things: 1) Netflix is not the culprit here, unless the software on the ATV2 is faulty or somehow Apple is re-streaming Netfix through some service of theirs and is making a mess of things. Also, 2) it tells me its not a network speed issue since I can view anything I want via Netflix on a slower PS3 without the issues I am having with the ATV2.
Either the Netflix software is faulty (buffering or error correction, or both) or something is screwy in the ATV2 hardware/software and is the problem.
For now, the ATV2 sits collecting dust as I can't get it to work with our Netflix account.