I tried and errored quite a bit of things, my main problem was trying to use a USB2 external drive attached to my G5, but once I switched to a Firewire drive it has worked perfectly ever since! I spoke with the apple tech folks and they have had a LOT of trouble with people trying to stream from USB drives so they are recommending Firewire.

I also setup a WIRED network from my apple tv to my router, this also caused the movies to start streaming faster. Plus, I live in the mountains and my internet connection goes down frequently, so with a wired network I can still watch movies when my internet is down.

Brown.Recluse

Just to clarify i did this with a Macbook Pro and a USB2 external HDD. The buffer is no more than 2 or 3 seconds to stream video.

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