I have four Apple TV's in my home, and I get this message all the time. What is intersting, is when it occurs on one,it occurs on ALL four simultaneously. We also have two iMacs, two iPads, and three iPhones, all use the same apple I'd and password, those other devices connect to iTunes just fine when this occurs with the TV's. I too can also watch previews, use Netflix, etc.
It is clearly a gremlin specific to iTunes and Apple TV's, and your account. Re booting the TV does work.
I am forever rebooting Apple TV's, as well as forever returning them for free replacements as they experience a variety of problems, locked screens, failure to pair with a remote, etc.
Apple knows the fix for this is a reboot, so why is that not an express lane answer??
Very frustrating devices, ITunes does have the best content, and the highest prices. But I suggest use your apple tv for watching Netflix at $8 / month rather than $5 / movie. Especially when they do not seem to care enough to fix bugs like this so we can enjoy the pleasure of overspending for their content without extreme frustration.
Imagine three kids with Apple TV's in their room. (we do not have cable). A thousand "Dad, can you come fix my Apple TV again".
Signed, the 24 hour on call IT man because I was stupid enough to invest in so much apple product.
Bottom line? Anytime anything goes wrong with your Apple TV, it's not you as long as you have Internet, it's Apple, reboot when in doubt, or unplug and replug, even better.