Ok so primarily i want to watch my itunes content on my hdtv. Im assuming the apple tv device connects direct to my tv using HDMI? It then connects to my wireless network, connects to my pc and then i can stream content directly to my tv?
That is correct. When your computer is on and running iTunes you will have access to your library, streaming wirelessly via the local network. All you need to do is enable home-sharing on computer and ATV.