Possible to stream movies from external HD- Airport Extreme- AppleTV?

Hi Folks,
I'm new to these boards so 'hi'. I have looked all over Google and various other forums for this answer but haven't received anything definitive.
I'm basically trying to find out if it's possible for me to connect an external hard drive to my Airport Extreme Base Station, and have that stream movies to my Apple TV?
The main reason for wanting to do this is my only computer is a MacBook Pro which only has a 120gig hard drive on it, and I only typically have 20-30gig free at any given time after applications etc. I want to store all my movies in one location, was thinking of buying a 1TB hard drive and connect as above.
I don't want to shell out for the hard drive if this won't work though. I'm frustrated at myself because this is what I thought the internal hard drive of the Apple TV did and thats why I bought the 160GB version, but everywhere I read people say DO NOT store movies on the Apple TV because it's really buggy. So what is the 160GB??
Any help, guidance, and tips would be greatly appreciated.
Cheers,
Frank Drebin

AppleTV can only access media that iTunes is aware of by virue of them being added to it's library.
The files that iTunes knows about can be on any drives that your Macbook can access, internal, external or newtork based.
AppleTV relies on iTunes to fetch data either to sync or stream and cannot connect to external or network drives itself.
A drive attached to your base station may well work but it will depend on your network being up to the task - iTunes must be running, fetch the data from the drive across your network, then send it to AppleTV.
AppleTV is not designed as a storage device. It has 2 modes of media playback - synced and streamed. Syncing media stores a copy or mirror of a media file on it so it can be used when iTunes is not running - the 160GB lets you store many more media file copies thn the 40GB. For streaming, which iTunes is required for, and which transfers data on the fly for AppleTV from the computer or connected drive via itunes, the size of the AppleTv drive is irrelevant.
While what you want to do would probably work, for streaming to run smootly without dropouts the network would need to be up to it - in most cases it will, in some it won't.
Your other option of course is to store most of your movies on an external USB drive and plug that into the MBP when you want to stream or sync to AppleTv. You just need to change iTunes Preferences to not copy files into it's library thus not filling up the MBP drive. Same method you'd use for adding files from a drive attached to your base station. An alternative is to create a new itunes library completely on an external drive.

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