I'm having the same problem. I've called iTunes support and even had a trip to the 'Genesis bar'.
And even though they have been very helpful, nothing has solved the issue.
It's a strange one as I can still play films I have purchased from iTunes without a problem.
It's only when I use Homeshare that the problems start.
I did have a short lived sucsess when I rebooted my iMac and signed back into homeshare and it worked fine for a few hours,
before I was booted out of home share AGAIN. I guess we will have to wait to see if a update solves the issue, otherwise I've paid £100 for a box that is next to usless.
I've had similar issues with the latest updates (all Apple software up-to-date)... It's driving me frickin' insane. I listen to one song and the connection to homesharing drops. I've connected via ethernet cable to a d-link wireless router.
Anyway, on all my searches I came across this
Reset the ATV and update using the wireless not the ethernet cable... my internet is way too slow to know if it'll work anytime soon, but I thought I'd share. If it works... let me know. Maybe it will solve some misery.