That's exactly what I've been doing upstairs (running an AppleTV without video output for AirTunes. I set it up with the home theater downstairs where I have my other AppleTV and then once set up, unplugged it and took it upstairs to my music-only listening room. It works fine. I use an iPod Touch with Remote Buddy to control the music selection on it.
I DO have an airport express (the new 802.11N one at that which I picked up for $79 at Best Buy due to having the wrong sign up for the clearance of the old one that was gone). The PROBLEM with the Airport Express is that it doesn't maintain a digital signal when you change tracks so my old digital to audio converter I already had for some time would lose its 'lock' on the signal and take 2+ seconds to get it back again when the new track would start playing. So essentially, I'd miss the start of a song any time I manually selected a new track to play (playlists would be ok after the first song since the cross-fade option can keep the signal alive; I'd set it to one second only).
Well, that got annoying and so I tried Airfoil out and that solved the problem (it buffers the output first), but it didn't sync precisely and it had clicks/pops/drops every so often (apparently their backwards engineering isn't perfect and well frankly, it SUCKS to hear stuff like that on $2000 speakers). So that left me with two other options. One is to buy a new DAC (digital to audio converter) that is fast enough to not miss the start of a new song and the other was to either use the Airport Express' built-in DAC which is pretty darn crappy and can't even produce a full range signal (maxes out 2V less than the maximum 16-bit signal a lossless CD rip can produce from what I've read) or get an AppleTV which has a better quality DAC built-in and would also give me future video capbility down the road when I plan to get a flat-screen to hang above my piano in that room. So, I use the Airport Express for a 2nd network (to use B/G devices on) now instead.
Apple apparently has some issues to work out in AppleTV, though. I can't seem to buy/rent any movies on it. It tells me it doesn't recognize my name/password (which work fine on my actual Mac and PC computers) and this appears to be a fairly common/widespread issue. Some people have got it working by various tinkering methods, but none have worked so far for me. Apple is apparently perplexed themselves why it happens to some people/hardware and not others. I mean it's a simple encrypted password check for goodness sake.... This is making them look bad. Apple should be "it just works" not "it can't do its primary function". Fortunately, my primary function was a music system, not video rentals, but I got the one downstairs originally because I do have a high definition 93" projection system and it's more convenient to rent an HD movie I might only watch once than buy a $30 blu-ray disk each time (or rent them through Netflix and get a scratched up POS disc that won't play, which is frustrating as all heck, but then so is selecting rent and it telling me it doesn't recognize my valid password/id for that matter).
