ITunes, Apple TV and Time Capsule streaming questions

I have a question about how to handle an Apple Tv with my new Time Capsule setup.
Setup is as follows
Macbook with 29g iTunes library, mostly music and purchased iTunes Music Videos. Some movies converted via Handbreak. All of that synced to my 160g ATV.
Time Capsule with 300g of movies converted via Handbreak.
Macbook Pro that has the movies on the TC as it's library, shared to stream to the Apple TV.
I am connected with the Macbook by G, the Macbook Pro by N, the Time capsule by N. assume that the Macbook is off, so that everything is N.
If I stream a movie, does the path go Macbook pro reads time capsule, time capsule sends the data to the MPB, and then the MPB streams to the ATV?
Or, does the ATV read the path of the music on the TC, and stream it direct from there?
I tried to play an online game (World of Warcraft) while watching a movie on the ATV that is on the TC that hitched / studdered / buffered like crazy.
I want to eventually set up 2 ATVs both reading the media on the TC to stream. From the looks of things now, I wont be able to stream 2 at the same time, and definately not while playing online.
I know there are a lot of threads out there about iTunes and wht not, i've read them and did my best... but i'm not a pro at networking. Not sure if I have settings wrong, or can improve something, or if i have just bad luck
Any and all info, with the Idiots Guid explanation, is appreciated
Thanks

Update .... fixed this problem. 3 words:
LINE OF SIGHT
I had full signal on both my Laptop and my ATV before the fix. I figured with my tiny 900 sq foot home with the TC no more than 30 feet unobstructed from the ATV and Laptop that I would be fine since the signal was full.
However, on a whim i moved the LAPTOP into the room with the TC and streamed to the ATV... and it worked FLAWLESSLY. I then logged on my online game, and it still worked flawlessly. I then opened Ventrillo (basically VOIP program to chat w people) ands till streamed flawlessly. I then opened up Adium and loaded Yahoo/AIM and it was still streaming fine.
I then moved the laptop back into the next room, and it instantly hung.
So i picked up the Time Capsule that was on a desk next to a wooden box that i use to store CDs in, and put it on top of the box. I then reloaded everything and streamed with laptop back int he next room and it was perfect. I was able to have all the above open AND surf the web (so we are not talking a DECENT amount of traffic on the same laptop that streams the movie to the ATV) and it was fine. I did notice a 1-2 second video hitch (not audio and no rebuffering) whenever I opened a website that had more than 40 photos on it or any video... i guess that coupled with the game, VOIP and IM software was too much traffic.
So, I am happy to annouce that i have no problems streaming itunes or streaming movies from the time capsule to my apple tv. i am so happy. I was prepared to go and buy a mac mini and wire that and the apple tv to the tc. Instead, I am probably going to buy a second ATV for the bedroom.

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    Message was edited by: Matt Domenici
    Message was edited by: Matt Domenici

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  • Hi.. I'm new to mac, I've got a mac book air and time capsule is it possible to save music,video from iTunes Store directly to time capsule leaving my 128GB Mac free? If so  please help..

    Hi.. I'm new to mac, I've got a mac book air and time capsule is it possible to save music,video from iTunes Store directly to time capsule leaving my 128GB Mac free? If so  please help..

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  • Just bought an apple tv and it wont stream music from my imac. when i click on the apple tv music icon it goes straight into the itunes store and so i can only access the music i have bought from itunes not the music i have stored in itunes on my computer

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