Home sharing problem solved in a flash!
You will not believe this but it worked! I checked the leads in the ATV2 box just now and noticed the ATV2 box WAS UPSIDE DOWN. I put it back the right way up and BINGO! it works perfectly, music, movies and home movies, the works, and that was after hours of struggling yesterday. I kid you not, check the box is the right way up!
iMac 24" 3.06, Mac OS X (10.5.6)