Sam,
Can you give us a little more information? You say your DVD player has "surround sound" but I am not sure what that means. Do you hook speakers directly to the DVD player? In other words, is it one of those all-in-one home theater units? With most DVD players, there needs to be something else to decode the Dolby digital data and convert it to signals that drive speakers to provide sound. This could possibly be the TV, or a surround sound receiver. Myself and I suspect most people here use a surround sound receiver with multiple optical inputs for cable box, DVD/Blu-ray player, Apple TV and whatever else we have.
Also, by "HDMI output" do you mean "HDMI input"? If so, I assume the Apple TV is connected to that input on your TV, no?
Steve