Is synching necessary - just streaming from the Mac?

I have a music library which exceeds 1TB and over 200GB of pictures, but my first generation ATV has definitely much less storage space. My question: Can I stream content directly from my Mac, or am I really forced to download the fraction of content that I want to use to the ATV? If I can stream directly from my Mac, how does this work? I didn't find any setting in iTunes or the ATV settings menu. Thanks!

Like said,
Absolutely, but streaming photos wirelessly might be slow. If you can Ethernet it, you'll be laughing. Gigabit Ethernet and you'll be in stitches.
So just how do you get 1TB of music ? that's about half a million dollars worth of CD's.
And 200GB of photos ? Even with all the high resolution photos I've taken all over the world, I've only got about 40GB. Too many for iPhoto, and streaming.

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Many Thanks!

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Adding another user on my mac and sharing a new library works not also. But sharing from another laptop in my WiFi works. So this has to be a network issue on my mac, not only my user, but an issue of the whole system.
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Is synching necessary - just streaming from the Mac?

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