Apple TV Music
Oddly, the primary Music app on the Apple TV homescreen simply links to your iTunes Match account. This is a paid for service (£21.99 per annum) that scans your local music collection and checks it off against the vast iTunes library in the cloud. If Apple has the track/album in its database, you can then access that music from any iCloud compatible device. So if you've an obscure music collection that iTunes doesn't recognise, those tracks won't be available in iTunes Match. It's a useful service certainly but it has its limitations and moreover it seems odd that you can't simply access the music you've already bought in iTunes, leaving the Match service as an optional extra.
If you've a computer on your network with an iTunes library, however, you can access this directly using the Home Sharing feature, available through the 'Computers' tab. This is really easy to use and works superbly, but it does require the computer to be on whenever you want to listen to your music. INn contrast, with some media players you can simply access your music stored on a network drive (NAS). And while you can have your iTunes library stored on a NAS, you still need iTunes running (which NAS devices can't run) to actually access it using the Apple TV.
Similarly, it's worth pointing out again that you can't just plug in your own media by way of a hard drive or USB stick – playing "your mate's new track that he just brought over" will require transfer to some sort of Apple device first.
Apple TV Airplay
One of the neatest things about Apple TV, though, is AirPlay. This Wi-Fi service allows you to really easily link your iPads, iPhones, iPod touches, MacBooks and desktop Macs with the Apple TV. Just sign in to the same AppleID on each device and the AirPlay option should be available straight away in iTunes on Macs and the photo viewer, video viewer and Music apps on iOS devices.
You can use it to show your pictures and videos on the big screen or play back your music through your AV sound system. The interface is really easy to use and it's incredibly quick too.
Alternative devices can do something similar if they and your TV or set-top box are DLNA compatible - or some mobile devices even have HDMI outputs so you can just plug them straight into your TV - but neither solution is either as easy or versatile (DLNA isn't commonly available on laptops for instance). There really is something grin-inducingly fun about simply tapping a button and having the content on your phone appear on your big screen.