Best location for iTunes Library

Just trying to figure out where the best location is to put the iTunes Library to improve streaming to the AppleTV.
I have an AirPort-n that acts as a remote hub for my Tivo, PS3, and now AppleTV (all three are hard-wired to the AirPort-n). Since there’s the ability to connect a USB drive to the AirPort-n, would it make sense to co-locate the iTunes library on a drive connected to the AirPort-n with the wired AppleTV (that is, if it gets the data directly from the Library), or, does the streaming video actually have to flow through (processed by) the host computer (Mac) that ‘owns’ the iTunes Library?
Making sense???
THX!

does the streaming video actually have to flow through (processed by) the host computer (Mac) that ‘owns’ the iTunes Library?
Correct. There must be a copy of iTunes with the library you wish to sync/stream on the host computer, and iTunes must be running for the Apple TV to connect to it (the Apple TV does not pull directly from the library). So from that standpoint, it really doesn't matter where you keep the library, as long as iTunes on the host computer can find it.
I'm sure others will express opinions, but I'm uncomfortable with the reliablity and performance of drives connected to a wireless base station (remember that if your Apple TV is connecting wirelessly, you'd essentially be doubling the wireless bandwidth you use any time the Apple TV syncs or streams), so unless you have a good reason (use with other computers, for instance) to have the drive connected to the Airport base station, you might just want to connect it to your host computer.
Hope this helps.

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