I had this problem for ages too, and got no help from Apple.
I managed to fix it though. Not saying this will work for you, but it's worth a try.
For clarity, I have an Apple TV 2 updated to the latest system - 5.1 And I am using my late 2009 27" iMac (running Mountain Lion) to generate wifi from it's built-in card. I was fine with Home Sharing until 5.1, when it stopped working.
Anyway, I fixed it.
I went into System Preferences on my iMac. There, I clicked on 'Sharing', and then again on 'Internet Sharing', so I could go into 'Wifi options' down in the corner. When there, I clicked on the 'Security' dropdown. 5.1 means it only lists WPA2 Personal. But if you hold the option key and click the dropdown, you have a choice. I changed mine back to what it was before - 128-bit WEP. Then I entered the password, clicked 'OK', and re-checked the 'Internet sharing' box.
Now my Apple TV can see my iMac. It still seems a little slower when initially loading a film or TV programme, but it's reliable.
Let me know if this works, or if you have any questions. Good luck.
I have an Apple TV 3. 5.1 didn't really affect me much, as I use a Wi-Fi connection, but after updating to 5.1.1, I could no longer connect to Netflix, and couldn't get Hulu Plus to work either (although it did let me set up an account; one I quickly deleted). I tried these with ethernet, and they worked, but ethernet is impractical for me. I had to downgrade to 5.0.2 to get things working again. Instructions on how to do this are at https://discussions.apple.com/message/20008613#20008613
It seems 5.0.2 is still a signed update, and the downgrade went off without a hitch.
I reported this issue to Apple.
Everytime I try to turn airplay on to show my desktop screen on my apple tv I get the following error message:
Er heeft zich een fout (-6722) voorgedaan tijdens de verbinding met het AirPlay-apparaat 'Apple TV'
"An error has occurred (-6722) during the connection with the AirPlay-device 'Apple TV'
Anyone else having this problem?
Being as Im the orgial poster of this question… NOTHING has helped me, I blame this on APPLE. I have tried everything that is posted in this *Group* but nothing works. Thanks for everyone posting with a solution. Sorry I never wrote back but it don't work so why wait the time!
WHAT does work, so DOWNGRADE your OS of your appleTV and NEVER update it again! Yes APPLE if you are reading this, I HATE your updates! They are GARBAGE! iTunes 11 (Puke) give me back my old GUI, keep the new one I just want the old one too! PLEASE!
As for AppleTV I love it, before the update (I like the way the new update looks) BUT IT DOESN'T work, *** does it matter how it looks!
Last words, DON'T DO AN APPLE UPDATE, your stuff will break!