Thanks for your comment. I should have made it clearer in the heading. I was using OS X 10.7.2 and iOS 5 while on holiday and Photo stream was working fine (exept the phone charges blew my budget!). On return home I started up the Apple TV and, without checking details, updated the software to 5.1. That's when the problem started. The 5.1 system requested a sign-off of new terms and conditions and that was not possibe on the Apple TV itself. It would not start Photo Stream. My iPad 1 would not upgrade to iOS 6 so I upgraded my Mac Mini to 10.8, signed up on the T&C and then Photo Stream came up OK. Problem solved but my kids would not wait around.
Issue solved. Not happy with the cross dependancy of software versions when there are so many Apple devices around. Must have some backward compatibility on a device such as Apple TV.
Now the new OS X iTunes version cannot find thousands of tracks!!!!!!! . . . . . . keeps me out of mischief 🙂