I contacted Apple about the problem and they told me in a reply to check basic things like to make sure I am connected to the Internet and that my software is up to date, which is ridiculous. Of course it's up to date and I'm always on the Internet. I've got two AppleTV units and they both have the same problem and I've tried just about every suggestion I've read on the Internet. It was also clear the lady that answered has never heard of this problem so there is clearly no communication between the support team members at Apple what-so-ever. I sincerely doubt they are working on any kind of a software fix for this problem as they clearly do not believe there is a problem other than someone not being logged into the Internet.
I'm guessing either AppleTV doesn't like my NetGear 802.11 Draft N router or some security setting on it (connects to it fine, though it gets a better signal than my 802.11N Airport Express, but using that didn't solve it either so maybe not, although it had to be plugged into the Net Gear router via ethernet to try it since none of my desktops have Wifi to configure the Airport Express otherwise) or there really is a defect in a large number of AppleTV units.
I even tried resetting to factory on the unit and NOT using a connection to my Mac (which works fine with iTunes), but instead just trying to connect to iTunes directly from AppleTV and renting a movie. It would NOT log-in to iTunes. It gave an error stating the ID/password wasn't recognized. If I sync the AppleTV to my Mac, it'll automatically log-in to iTunes (well in preferences, at least it indicates it's connected), but it then says it's not authorized to play existing content and when it asks for a password to get new content, it says it doesn't recognize it once again.
The problem is beyond frustrating and I've got TWO AppleTV units and they both have the same problem so taking these things back for exchanges doesn't seem like a likely solution. I'd just get another one that acts up. If there's some setting somewhere creating the problem, I sure as heck can't find it. I mean how hard is it for Apple to get their AppleTV units to enter a password correctly? The AppleTV can clearly connect to the Internet and the iTunes store (I can browse the movie/tv show lists and watch previews), but it simply won't accept a VALID id/password from the AppleTV unit itself and despite iTunes stating on-screen that it's "authorizing" the two AppleTV units, it clearly does not since neither one can play DRM content or buy/rent tv shows or movies.
I'm guessing either AppleTV doesn't like my NetGear 802.11 Draft N router or some security setting on it (connects to it fine, though it gets a better signal than my 802.11N Airport Express, but using that didn't solve it either so maybe not, although it had to be plugged into the Net Gear router via ethernet to try it since none of my desktops have Wifi to configure the Airport Express otherwise) or there really is a defect in a large number of AppleTV units.
I even tried resetting to factory on the unit and NOT using a connection to my Mac (which works fine with iTunes), but instead just trying to connect to iTunes directly from AppleTV and renting a movie. It would NOT log-in to iTunes. It gave an error stating the ID/password wasn't recognized. If I sync the AppleTV to my Mac, it'll automatically log-in to iTunes (well in preferences, at least it indicates it's connected), but it then says it's not authorized to play existing content and when it asks for a password to get new content, it says it doesn't recognize it once again.
The problem is beyond frustrating and I've got TWO AppleTV units and they both have the same problem so taking these things back for exchanges doesn't seem like a likely solution. I'd just get another one that acts up. If there's some setting somewhere creating the problem, I sure as heck can't find it. I mean how hard is it for Apple to get their AppleTV units to enter a password correctly? The AppleTV can clearly connect to the Internet and the iTunes store (I can browse the movie/tv show lists and watch previews), but it simply won't accept a VALID id/password from the AppleTV unit itself and despite iTunes stating on-screen that it's "authorizing" the two AppleTV units, it clearly does not since neither one can play DRM content or buy/rent tv shows or movies.