Intermittent problems are often a result of interference. Interference can be caused by other networks in the neighbourhood or from household electrical items.
You can download and install iStumbler (NetStumbler for windows users) to help you see which channels are used by neighbouring networks so that you can avoid them, but iStumbler will not see household items.
Refer to your router manual for instructions on changing your wifi channel or adjusting your multicast rate.
There are other types of problems that can affect networks, but this is by far the most common, hence worth mentioning first. Networks that have inherent issues can be seen to work differently with different versions of the same software. You might also try moving the Apple TV away from other electrical equipment.
Thank you WC but if it indeed was my netwrok, wouldnt an error accur when using anything else on it like, listening to Last.FM or watching a movie?
It ONLY happens (with this sort of frequency) when listening to music that originates from iTunes.
Also, my ATV sits on top of my receiver and I have no where else to move it as it has to be near my other audio equipment...
I was having this problem too. My setup is HP Notebook running Windows Vista Home Premium streaming music, etc. in iTunes using Homesharing via wireless connection to Netgear WNDR3400v2 router and Ethernet connection to Apple TV 2.
Finally in frustration what I did was uninstall Apple software from my computer (iTunes, Bonjour, Apple Software Update, Apple Mobile Device Support and Apple Application Support). I left Apple Quicktime installed. I then downloaded and reinstalled the latest version of iTunes (10.7.0.21).
I disconnected power, HDMI and Ethernet cable from the Apple TV 2 for a minute then reconnected all.
I have no idea which if any of these steps resolved the problem but it has been eliminated so far (about a week now).