SOLVED for ATV 3 v5.1 Update
Background
Following a software update to v5.1 (from v5.0.2) the ATV restarts and is stuck on choose your language. Selecting the language results in a black screen before the unit returns to choose your language.
or
Following a software update (as above) the ATV restarts and is stuck with a black screen and a slow flashing light forever.
My Solution
Step 1:
Remove the fixed wire Ethernet cable and power on.
Step 2:
After selecting the language the unit will look for a wireless connection with a button called "Other". Do no press "Other" and wait for 30 secs. If you do not see a busy indicator (spinner) inside the button and no wireless networks are found press menu on your remote. Repeat pressing menu until you get to "Computer" and "Settings" main screen.
or
The unit powers straight up to the main menu "Computer" and "Settings"
Step 3: - Be careful with this step or you'll kill your wireless! If you are unsure then get someone who knows how to configure this.
Logon to your wireless modem management console.
Reconfigure the wireless setting to 2.4 GHz b/g/n with a speed of up to 54 Mbps and a channel of 11. Set the security to WEP and generate a pass code.
Save and wait for the modem to reconfigure.
Optional: Test the new wireless configuration with a device that you know works.
Step 4:
On the ATV navigate to the settings >> General >> Network >> Wifi and Wait on the "Other" screen.
For me the wireless networks started appearing at this point and I could select the one I needed and enter the pass phrase.
If they don't appear - power off/on again back to menu, network, wifi, other.
Step 5:
Now plug in the fixed wire Ethernet cable and the unit no longer resets!
Side note:
Setting the wireless back to the original setting is now working - don't know why.
My settings were originally 2.4GHz b/g/n, channel Auto, Speed up to 300Mbps, Security WPA2-PSK (AES).
Hope that helps you.