I was having a problem with my first generation Apple TV: videos were stuttering while being played. The issue seemed more severe when I was watching HD content, but I was otherwise unable to correlate “bad” experiences with better ones.
I managed to resolve the issue by downloading all of the content on my Apple TV to my computer, then formatting the device, and re-loading it with selected content. I theorize the issue was that the hard drive on the Apple TV was so full it was unable to buffer as much content as it wanted, so any network variation between it and the source of content caused it to stutter. Formatting the device, then re-loading it while leaving plenty of space free has given it the buffering space it wants.