Latest Apple TV Kills entire network connection

I was super excited to purchase my first Apple TV, until I hooked it up. I have found if I use it wirelessly, it will kill my entire network within a short amount of time. 10-15mins. After that time, no computer can access anything on the internet, and the Apple TV will not find the library again after I finish watching whatever was playing. But, everything runs smoothly until that point. It finds the library, internet access through ATV is fine, remote app on my iPhone works fine, it's beautiful! …for a short time.
Through troubleshooting that issue, I found if I connect via ethernet, it will not find my iTunes library at all, but it will connect to the internet just fine. ????
I've found a few random things on the web related to this, but they are all in reference to old ATV models, and I cannot seem to come across any posts mentioning my exact problem. So far, I've tried doing the following on both wired and wireless connections:
-made sure my Linksys router has the latest firmware version available
-tried increasing the client lease times on the router to roughly 1 week.
-tried manually configuring the ATV IP to maintain a static address, but it still kills the entire network when running wireless, and will not find the library when wired in.
I've never had problems with my network before; it's been running smoothly for 5 years. I've also been streaming Netflix to my LG Tv for about a year now with no issues. I am totally happy to invest $99 in an ATV-love the concept, love the convenience. But if Apple has something going on where it will only work with an airport extreme, I am not happy with investing $278 in an apple tv when my current wireless setup works just fine. Does anyone have any ideas on what I may be doing wrong or how this can be resolved? I really do love the idea of having access to my media wirelessly, and would hate to have to return the ATV.
Tech details:
Latest little ATV model, library hosted on a mid 2011 MBPro Core i7 running OS 10.6.8 with latest iTunes version. My library has about 65gigs of music and about the same in movies. We have that MacBook and 1 PC runing on the network. I am using this Linksys router: http://homesupport.cisco.com/en-us/wireless/lbc/wrt54G
Many thanks in advance to anyone who can help!

Very similar situation here. My ATV3 is connected via WiFi, but it loses its network connection if the following two conditions are met: it sleeps, and my Aiport base station is turned off any time afer the ATV sleeps. When I power up the Airport again, the ATV does not find my network without either restarting or selecting the network manually from a list of nearby networks.
In other words, sleep is OK only if the network is never powered off.
-dan

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