Streaming HD movies from Itunes to Apple TV 2

Hello all,
I am having an issue streaming HD (m4v) movies from iTunes to my Apple TV 2. First off, I am able to stream Netflix flawlessly using my Apple TV. The HD Movies from ITunes glitches\lags every 20-25 seconds. Here is my setup.
Router: Apple Airport Extreme, using 5ghz band
Laptop: Macbook Pro
Any suggestions? I have tried turning off Dolby Digital in the Apple TV Settings, but did not help.
Thanks,
Dustin

I was having the same error. I switched Audio Language to default and Dolby Digital to 'on' and I finally can see the video, but with no sound...
I tried MKVTools and Handbrake, AC3 passthru for audio on both, iTunes plays nice, but Apple TV doesn't. Any other solution?

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