Wow - After a couple of days trying to find help setting up my New Apple TV and Login in to You Tube there was just not enough information in any one place. I searched Google, You Tube, Apple, and found bits and pieces and finally figured it out...At Least I was able to get mine to work. So here are some steps for you to take. I am not going to type all the information from the various steps you need to take. Just know you need to go to these places and set them up correctly before the Apple TV You Tube will accept your password.
1) Turn on 2 step verification in your G-mail Account settings...Look at the videos and help. Be sure to record or print your back up codes. Download the Google Authenticator app for your IPhone, IPad, IPod and set it up. So in a nutshell - Get your E-mail and IPhone, IPod, IPad working first with the 2 step verification code. This all working correctly will help you later login in to the Apple TV You Tube. There are instructions how to use the App, Exchange, Etc...Much to read in Google to get this far, but if you do not complete this step - It won't work........(well mine would not work) If your not using an IPad, IPod, IPhone, you can still get your desktop, laptop, etc setup and working.
2) The message from Apple TV You Tube that the account can not be used is simple, Apple TV wants you to log in so you can save to your favorites in You Tube, or rate a You Tube...You Must have a You Tube Account and Setup with the Google account name you are trying to use on the Apple TV You Tube. You MUST setup your You Tube Account Channels....This is where the Apple TV You Tube is trying to save your favorite etc. If this is not set up...the message that this account can not be used will appear.
3) If you got this far....Only one step left...And you probably already read about it...But when you try to log in to You Tube on the Apple TV....FIRST use your regular normal password that you use for You Tube...The message will appear that the password is incorrect....NOW..Don't try another account...Use the same acount and this time put in the 2 step verification password...You Create this verification code in your Google Account Security setting that you have used to setup your You Tube...
I hope this helps someone..I spent 3 days reading all the bits and pieces and there was just not enough information all in one place..GL