Here's the deal with 1-gen AppleTV and iTunes Store...

Okay folks, since Apple remains mum on the subject and I finally found a solution that works for me, I thought I'd share.
As far as I can tell, the issue lies with the "live" elements of the menus ("Top TV Shows", etc.) that were introduced in version 3 of the software, as I recall. Apparently, the method that the older units use to get that information no longer works, so the unit endlessly tries to reconnect. This causes playback to stutter terribly, as well as slowing down menu navigation to a crawl.
Now, unfortunately, if your AppleTV shipped with version 3 or later, you might be out of luck. I believe one poster has suggested that using Parental Controls to restrict access to the iTunes Store might solve the issue, and I guess if it also turns off the suggestions above the menus, that might actually work.
Since my unit shipped with version 2.4, I was able to simply do a Factory Restore, which should work for anyone with a pre-v3 AppleTV (make sure all your content is saved elsewhere first). The caveat to this is that I can no longer access the iTunes Store (except Trailers), but if you own a first-gen AppleTV, you can pretty much kiss the iTunes Store goodbye anyway. The other problem is that my YouTube account (Subscriptions, Favorites, etc.) doesn't work, probably because so much has changed with YouTube since the introduction of the AppleTV. Come to think of it, it might have been YouTube issues that forced me to upgrade to v3 in the first place.
Anyway, I hope this helps, and I hope Apple doesn't remove this post. Obviously it's possible that they will do something to fix the issue (and it should be quite easy), but my experience tells me this won't happen. So, we have lost one of our big advantages over the newer models (being able to BUY instead of just rent), but we STILL have what I consider the most important advantage, and that is being able to sync content to the AppleTV and store it.
Thanks for reading, folks... good luck!

I have a Gen 1 ATV - Software 3.02. Worked like a champion - odd bit of stutter lately but otherwise good. iTunes V 11.1.5 running on MBPro.
Since 17 April 2014 I have been unable to see iTunes store on ATV interface - only showing My Movies and Trailers option. No Search or other options. Selecting Trailers option gives a jittery display that keeps resetting itself. It is not possible to play a trailer from that screen.
Same for TV Shows.
YouTube working fine.
Music cannot see my shared library, nor does it list the music already synced.
On my MBP (where the shared iTunes library lives) I can no longer sync anything to my ATV. Movies, TV Shows and Music have disappeared as options.
Full factory restore of ATV had no effect. No option to selectively synch TV Shows, Movies or music is available from within the iTunes interface.
Deleting ATV from my devices in iTunes, then adding it again had no effect.
As Apple have not yet deemed a response is necessary to the rapidly increasing number of inquiries about this issue, I will take the problem in person to the Genius Bar and post their response into this forum within the next 48 hours.
Watch this space..

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