Experiencing the same issues here. And it isn't the first time my 2nd Gen apple TV (ATV) has done this.
Today (and a couple of times previously), when I started up my ATV, a screen displays the "setting time and date..." message. But no matter how long you leave the ATV to 'think', it never completes the step. The screen prompts you to press menu if you can't connect... The ATV loads up to the home screen where you can still access Top Movies, YouTube, etc. But you can't see your Wish List and you can't rent movies.
Normally, you'd expect to be able to go to the settings tab and log into iTunes manually to be able to rent movies. Unfortunately, in this case, when you try to enter your username and password, you get an error message telling that ATV cannot to the server.
Previously, I have just unplugged the ATV and tried again. Sometimes the ATV would work again right away, other times it would take 24 hrs or so to work again. I had always assumed that the problem was at Apple's end - perhaps server overload or downtime? But now I'm beginning to think there could be a problem with my ATV.
Is anyone able to clarify whether the problem is a hardware issue, a network connection issue, a DNS issue, or something else?
Cheers.