Same problem with me too. My apple tv worked perfect for about a month and last week sometime it suddenly started exiting from Netflix and completely disconnecting from wifi. It happened very occasionally at first but now if I get two minutes of connection I'm lucky. Then, I wait a few minutes and it re-connects only to do the same thing minutes later.
I tried to restore as well but it wouldn't stay connected long enough.
I tried moving the apple tv away from my home theater system which was the only thing I could think of nearby that might cause interference, but that didn't work either. Not too surprising as my Wii has no problems with loosing connection and it was right beside the Apple Tv when the problems started.
All other wifi devices I use work perfect and when the Apple TV is actually connecting to my wifi, it shows a solid 5 bars.
Best I can tell is this is a problem with the Apple TV and not my wifi. And as mentioned in an earlier post, it is enough to drive a guy crazy with how irritating it is.
I plan to try and get it exchanged for one that works but my local Apple reseller isn't set up to do warranty exchanges so I will be taking it into an Apple store in a nearby city and try there. Hoping I didn't flush my money away buying this thing!