I fully agree, am extremely disappointed by my latest apple purchase. Apple TV simply does not work as it should. It is unacceptable to suggest constant rebooting, disconnecting cables, or resetting as some kind of solution. Every day I try and each time I receive the same error message. I have checked that my brand new Sony TV is properly connected & fully compatible with the most expensive HDMI cable possible. HDMI content works fine from other devices so why not from the ATV2? Through this device I can watch YouTube endlessly and I have successfully viewed some film content for brief moments before the error message appears. Switch off, wait a minute, reboot, reconnect, play again, it works for a few more minutes.... Then the error message. I have purchased a glorified screen saver with lots of pics, but that's as much functnality as I seem able to get.
I am now returning the product for a full refund as it clearly is fraudulent.