If you haven't yet bought an Apple TV2, don't bother until you get a new TV.
There are other streaming solutions out there which will work with your TV, and which have analogue outputs, 90% of which will be cheaper than anything which would successfully convert the output of the AppleTV to be usable with your TV.
Or there's the original Apple TV, too.
I cringe just thinking about the television picture you have to deal with