I Get an Error "To Access Your iTunes Library ..." And Other Things Are Wonky Too ... Can't Reset ... Internet Radio Drops ... But Things Look To Be Set Up Okay

When I use my Apple TV and try to play music from my computer I get an error: "To access your iTunes library on Apple TV, turn on Home Sharing in iTunes on your computer using 'myname'"
On my computer n iTunes Preferences / Sharing I have the "Share my library on my local network" checked with "Share entire library" -- no password, no update play counts.  I've turned it off and on again.
The Apple TV settings show we are "talking to" my WIFI -- it has my network, shows a good signal strenght, all sorts of internet addresses and IP stuff I don't understand ...
The "Internet" tab works with some of those things I'd never use -- like I see the current NHL standings.
My TV works and I get an ATV signal and those little chimes / bongs when I hit things in the menu.  And when it works I get audio so the cables and TV are okay.
In the past I had trouble with the settings for my favourite Internet Radio stations (the provider changed their URL but Apple didn't update the presets for a while) but those are now resolved.
I had a crappy old G class router and week signal strenght but I have a new N class Cisco router with a strong signal.
But other things are wonky:
* I play interent radio and my station will go fine for about five minutes then stop -- the little wheel spins trying to reconnect.  Sometimes it resets but more often than not it won't.  I just tried again four hours later and the same thing.
* I've unplugged the ATV and plugged it back in but no noticable improvement
* I tried to do the factory reset from the ATV menu.  It says it will download the latest bla bla bla and after a few minutes tells me "Apple TV can't download latest update right now, try again later" -- I've tried three times today always with the same results.
* I unhooked it from the power and HDMI and plugged it into a Micro USB cable and plugged that into my Mac -- it doesn't show up in the devices in iTunes.
* I have a bunch of photos in a folder that I use for my ATV Screen Saver.  A few weeks ago I added two photos to that folder -- they don't show up in the ATV screen show but the others still do.
* When I started today I checked my iTunes and the airplay icon didn't show in the bottom right (beside the genious icon and the little thing to show or hide the sidebar).  Now I noticed the Airplay icon is there.  When I try to switch from playing through my computer speaakers to my Apple TV I get an error "An unknown error (-15006) occurred while connecting to the Airplay device "Apple TV"" -- the ATV shows that Airplay is on.
* I see from the ATV settings that I'm running ATV Software 4.4.3 (3323) and when I do a "Update Software" on the ATV it tells me that my software is current.
* My iTunes is 10.5.2 (11) and my OS is 10.6.8 -- both are up to date.
Yikes and double yikes!
Any ideas?

Hey Chunk,
I love the idea of the ATV more than I have loved the little black box but ... famous last words ... my ATV seems to be working better these days.
A big challenge for me was too many variables at play -- new router, new ATV OS / firmware / whatever, changing internet radio presets, a less than perfect physical set up ... and a short attention span from yours truly.
Here's what I did.  Somwhere in these changes things got "fixed."
* I unhooked the ATV and did a factory restore by hard wiring the ATV to my computer with a micro USB cable (no external power needed) working through iTunes (I run iTunes 10.5.2 on an iMac with OS X 10.6.8).
* after the reset I now have ATV (is that an operating system or a firmware?) 4.4.4
* then I plugged it back into my home theatre and it didn't work :-) but in slightly different ways.  The settings showed that I was connected to my home network but I couln't get connected using my Apple ID and no internet radio.  (it is often counterintuitive -- like why when I want my ATV to talk to my iMac over my local network am I logging in to the iTnes Store with my Apple ID? but there you go.)
* I booked with the genius bar at the Apple Store and put my ATV in my pocket.  They pulled out a TV, HDMI cable, ATV power source and even the remote -- all I provided was my little black ATV.  We hooked the ATV to their TV and from the Apple Store (using thier WIFI) I logged in using my Apple ID and the thing worked fine.
* so now I knew that my ATV was up to date and it worked in the Apple Store using their network so it looked like the issue was my network.
* rebooted my router and noticed that when I had upgraded to the new super dooper Cisco n router we had plugged my iMac direct to the router via ethernet cable.  I unhooked the ethernet and now just run my computer WIFI using AirPort.
And ...
It works.  I use my ATV exclusivly for music -- my iTunes and internet radio and AirPlay -- and now both work fine.  The ATV does pick up photos from my iPhoto for the screen saver and all that other stuff -- netflix, youtube, the hockey scores, ... all seem to be there.  And my son played a video off his iPod Touch using AirPlay.
I know my approach is more scattered than a proper scientific try but ...
From my experience ... reset the ATV and get it up to date; see if it will work on someone else's network; check your network set up.
Good luck!

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