Apple TV locks up when watching movies from HD

I have an Apple Tv that is very laggie. I tested Apple TV on a whole different house/network and it ran fine so it's either my desktop, external HD or router. Surprising as my router and HD are the best you can buy and the computer was just wiped clean.  Nowhere near other home networks causing conflicts and movies run fine on my other AppleTV setup.
How do I troubleshoot?

The computer doesn't really have to do all that much to stream movies to the Apple TV, I've streamed HD movies before from an old iMac with a 450 MHz processor, I doubt it would be the comuter per se, but I suppose it might be something on the computer.
It could be router settings but I barely know everything my router does so I might not be too much help there.
You could move an HD movie to the computer to confirm/eliminate the external drive.
You could connect via ethernet to confirm/eliminate the network.

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