I had great trouble connecting i phone 5 iOS 7 to air play on Apple TV , after contacting Apple they told me to pull up control centre on home screen , which makes all the difference, as I had gone into apps and tried pulling up control centre and all the icon said was airdrop and no airplay before. I have 3rd generation Apple TV which said it couldn't connect to I pad 2 but Apple told me it could via IOS 7 pulling up home screen it works, very helpful apple are I hope this helps
ran into similar issues after updating ipad 2 to iOS7 - airplay icon is visible (via swiping up) but nonfunctional...
reboots - ipad2, appleTV, router, PC - did not work
i disabled the 5GHz band of my wireless router - now i only have 2.4GHz wi-fi on, and it's working
must be a bug of some sort with wireless n 5GHz band