Can a 256K download speed /64K Upload speed work with Apple TV?

My connection speed is 256K/64K, does it work with Apple TV?

I'm sure it will work, just very slowly for accessing itunes Store content such as rentals.
I'm on a relatively slow connection of 1Mbps and I'd say a standard def 100 min movie might take 4 hours to download so you could at least quadruple that. A HD movie rental is larger and I have to download over say 10-12 hours (eg overnight for following day viewing or whilst at work), so again you could probably quadruple that.
Once a purchase/rebtal had downloaded fully it will playback normally regardless of connection speed.
Also your home network is likely to be much faster than your internet connection so anything compatible you play back via your iTunes should work fine.
Where you may see problems will be with movie trailers, YouTube and online photo access - they will work to some degree but you'd probably get a video start playing then stop/start having to rebuffer all the time (this happens to me with trailers). Online photos (eg Flickr/MobileMe) will undoubtedly work, just more slowly.
So, for compatible music/video you own and resides in itunes, playback should be fine. Rentals may take a day or a couple of days to fully download so you'd need to plan ahead - if your video store is round the corner you'd probably stick with it!
Also remember that if you are downloading a large file like a movie/movie rental it will hog your internet bandwidth and slow other internet access from your computer. You may also want to check if your ISP has download caps in place or charges per GB downloaded for example.

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