Q: Cannot connect Appletv to wifi network

If there is no network entering an IP address does nothing since it would not beable to connect to that IP.  If your WiFi network is not comming up it might be one of the things below.  While it is possible to use AppleTV with WiFi and will mostly work it is not extreamely reliable.  Streaming video, espeically HD video over WiFi usally does not work that well for very long.  So you would probably be better off using a wired connection.  It is up to you though.

Things to look into:

    1.  ATV may be too far from the router.

    2.  The router my be set to not broad cast it's SID which would prevent connecting devices from seeing it.

    3.  The router might have MAC address filtering turned on which could be preventing ATV from being able to cnnect to it.

     4.  The router might be configured to use one of the Enterprise encryption standards that ATV does not support.

After re-reading your post I am wondering if you were using the wrong screen.  Did you get a menu option that showed you a list of WiFi networks to connecto to and your network was not on it?  Or were you looking at a list of network config options like IP, subnet, DNS, etc.  If it is the later then you were in the Wired network config screen not the WiFi screen.