I have the same problem, or issue. I really wished that the AppleTV would be able to see the Itunes library. The way AppleTV works is that is looks for devices on the Home Sharing portion of Itunes. If WD makes it an option to log into your Itunes account from the drive (such as Mionet) then it would work. I have also contacted Apple for ‘feedback’ that this would be a great option to have so that you wouldnt have to keep your Mac on all the time. That really would make it an even better product for WD if it could do that. I know that myself, would greatly benefit along with others that currently have AppleTV.
For now, I just boot up my Xbox360 to access all the files, but would be a great option so I could add soemthing like that to my parents network along with AppleTV, and be done with it. Adding the Xbox360 or other compatible DLNA device might be too overwhelming for them. AppleTV is easy simple to use and they get that.
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I also contacted Twonky to see if they can update the Twonky software to be able to do this function. I suggest other people put pressure on Western Digital and Twonky (because WD uses the Twonky software) to allow this to happen. If it did, would open up some opportunities for others in family to purchase more WD drives to compliment their AppleTV set up. They dont want to have to purchase an XBOX or PS3 with the folder structure is confusing to non game console users.