I initially started the update process and the saw the TV screen graphic which seemed to direct me to plug my apple tv into my PC.
Well... after scratching my head and getting a few ideas from discussions I realized there problem probably began due to some loss of transmission between my PC, Apple TV, and my Router.
Some information I found online suggested that one possible solution was to reset/configure the internet firewall.
in my case I found the fact that somehow my primary internet browser, chrome, was corrupt and could no longer get to the internet. This originally happenned a week ago and I though nothinig of it to use my safari browser instead. Then is clicked. Itunes was probably trying to use chrome to get to the internet as well.
Solution: I removed Chrome from my PC and then was able to connect to ITUNES. Then I plugged the brick... lol AppleTV into my PC and restored it. The restore process did the update first and then reset everything to factory settings.
Everything works fine and it's all so much better. I'm getting better performance overall and I do see a difference. Before the update youtube videos would stall several times during playback and now.. it's streaming nice and smoothly! Purchases on Itunes radio work great as well. Perhaps AppleTV links direct to the router now rather than performing checks in the transmission via the PC - so it acts now as a truly standalone device?
