I am having the same problem
I have a PowerMac G5 Dual 2GHz 2 GB 10.4.9, the latest iTunes, and a brand new ATV. The ATV is connected via Ethernet, and iTunes recognizes it and installed it in its Devices section. iTunes says it's synching, and the little wheel next to the ATV device in iTunes is spinning. The ATV appears to say it's synching as well (Synching is enabled).
However, there is no traffic showing in the Network graph of the Mac Activity Monitor utility. These are Gig Ethernet devices, so I'd expect at least 100 Mbps of traffic, but I'm only seeing a few k bits per second -- essentially background traffic.
I've tried switching between streaming and synching, but I can't stream, either. When I go to Sources-MBeckman's Music on the ATF, it says "Loading MBeckman's Music" for about a minute, then it goes back to the previous menu.
I've tried rebooting the Mac, and the ATV, to no avail. This thing is essentially a brick if I can't get it to synch. Apple does not seem to have any phone support for the device (at least no menu options at 800-SOS-APPL).
Help!
-mel