You are going to want to keep the iTunes folder on your local disk (in the Music folder). Just move the "iTunes Media" folder to the NAS location. When it is transferred over, open iTunes and, in the menubar, click iTunes then click Preferences. Under the Advanced tab, you will find something called "iTunes Media folder location", with a path, and a "Change" button to the right of it. Click the change button and navigate to the new location of the iTunes Media folder. Click Open, then click Okay.
On my Mac I have the iTunes media folder on an external drive with the library still in the iTunes folder on my Mac. This allows you to still view your library and change song metadata without having the external drive connected.
For a step by step guide on how to move your iTunes Media folder to a different directory than your iTunes folder, see this article: http://support.apple.com/kb/HT1449?viewlocale=en_US&locale=en_US
To access your iTunes library on your AppleTV, iTunes must be running on your Mac (although iTunes does not need to be the sole application running). Streaming systems may offer the ability to connect to your media directly through the NAS, although the metadata attached to the files through iTunes (playcount, rating, etc.) will not be found by simply browsing the iTunes Media folder.