Macrojack, I don't speak fluent AppleTV yet but can suggest the following: If you don't already have a wireless network, you can create one, and the AppleTV can join it (just make sure it is not hidden). Your AppleTV will then be able to link to your iTunes. It becomes the hub by which you can download content from the iTunes store (movie rentals, etc), play your music off iTunes, etc. I do not know about internet radio unless you download it as a podcast (which will work). I expect you may need something else for the drives.
Steve, I was actually aware of your PaceCar, and find it an elegant solution to the problem. I wondered for a couple of years why someone did not make one (until you did). I was, however, hoping to spend less money on my solution until my network (using a multiple wireless router network to get to my stereo & TV) is more solidly together. However, this gives me an idea... could one run an AppleTV into a Behringer DEQ2496 (toslink in and out), to a PaceCar to a DAC and keep it clean, or would the AppleTV to Behringer leg mean that the Behringer was processing an already jittery signal?