Apple TV buffering issues with iPhone 4s and iPad 2

Hi all,
I just got me an Apple TV 2nd gen (yeah, I know, ordered 2 days before the presentation of the new one). So far so good, the device is up and running, connects just fine to my Airport Express router and all.
However, if I try to stream a video from my iPad (2) or my iPhone (4S), the results are quite horriffic. The iPad videos would buffer for a very long time before they start and then quite fast after that the buffering problems restart. It's pretty impossible to play a video fluently of more than 20 seconds. If I'd try from my iPhone it's even worse with videos being 1080p, the thing just never plays, eventually the preloading process stops on the mirroring mode is cut.
I have to point out, all my devices are in the same room (WiFi) so the signal is the best it can be.
This is honestly quite surprising AND disappointing to be honest, given I bought the device mostly for that, so I can stream videos from my phone and pad.
Tell me, am I doing something wrong, or the video streaming over those devices is just a marketing gimmick with nothing real behind it?
Would it matter if I change my router from Airport express to Airport extreme?
Thanks!

I have the same issue with ATV3 and iPhone 4S. Everything works properly, no buffering issues when watching netflix, vimeo, youtube BUT when I try mirroring even a small 15sec iPhone movie it stutters and buffers and results to a choppy playback..same with larger mp4 files such as 1-1.5GB, buffers forever and never plays, I just re-encoded the same movie to 700MB and plays perfectly..
Why Apple, why?..so close..I can accept the bigger movie files issue, but not being able to playback properly an iPhone movie is funny..I recorded a movie with lower bitrate through Filmic Pro (Economy mode, up to 16Mbps)
and plays properly.
Is there an upcoming software update going to solve the problem or is it hardware related and therefore not fixable.
Please don't reply with a network related answer, by 2012 we know how to set up our networks and everything else runs flawlessly.
I'll apreciate a fast answer, we love Apple, but if it can't play an iphone movie (or a high quality movie from iTunes) it's just not up to my standards.
Thanks again.
JP

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