Apple TV doesn't accept my ID/password  when iTunes does?

Hi. I'm new to using the Apple TV and must be doing something wrong as I am unable to purchase anything directly via the Apple TV. One of the nice things about Apple TV is the ability to rent HD movies that are not always available via iTunes. For some reason Apple TV refuses to recognize my Apple id/password pair. Itunes recognizes it , as does the apple site ... obviously as I logged on to write this.... but Apple TV will not. I tried resetting my password. I tried resetting my Apple TV to factory defaults .... No luck!!! I can use Apple TV to see my computer's iTunes collection so I can watch a rental as long as I rent it via my Mac but I can't rent anything at all directly on the Apple TV. I have full connectivity to the Internet. The movie/TV choices are available and I can watch the previews but whenever I attempt to rent anything I enter my ID and password and am told "Unable to Sign In  The Apple ID you entered couldn't be found or your password was incorrect".  Any ideas?????

Hi.
You need to realise the problem is not with ATV2 so you can complete the update to software 4.2.2 when the ATV2 gives you the option.
The problem is with your security settings for your router.
When you set up your wireless router for the first time you would have been directed to a ip address beginning http:// (then numbers). This address would be entered into the web address bar in your internet browser.
When you have signed into your router settings goto the security settings and change security type to WPA2-PSK. Save your new settings.
You have now completed the router changes required.
YOU WILL NOW NOT BE CONNECTED TO THE INTERNET (Don't Panic)
Now goto the network and sharing center (I'm using windows 7) and then into manage wireless networks.
Find the connection you just using and delete it.
Now follow your routers manufacturers instruction to create a new wireless connection.
When you have created your new connection and you have full internet connection that is the hard part over.
Goto your firewall settings and into Program Rules. Find the rule for iTunes and delete it. Save/apply the settings and close (Don't worry a new rule will be created the next time you open iTunes).
Open iTunes.
Goto advance and check home sharing is on, you might wish to turn it off then back on again.
Settings regarding your computer and router are now complete.
Switch on ATV2 and goto settings. Check network settings for network you have setup is visable, if it is not follow the ATV2  and router instructions to create a connection.
When you have checked the network settings return to the main screen.
Goto computers > turn on home sharing. The link below give you a step by step guide to setting up home sharing.
http://support.apple.com/kb/HT4352
You should now be set up and be able to see your itunes library.
You can now also sign into itunes store.
I hope this information helps.
If you need anymore help please supply operating system and security application details if possible.

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