Significant discussion boards suggest that iTunes 10.2 broke MP4 playback to the Apple TV (and within iTunes).
Apple has made no comment. Even after an upgrade to 10.2.2.12, it remains broken on my PC when using AVS4You.
AVS4You used to convert Apple TV settings perfectly. But with my upgrade to iTunes 10.2, it broke.
This one looks like it's Apple's fault.

https://discussions.apple.com/thread/2777430?start=30&tstart=60
https://discussions.apple.com/thread/2778373?start=15&tstart=0

Anyways, I found a workaround.
Follow these instructions play movies on your Apple TV via iTunes Home Sharing.
This is for normal, stereo sound.

Open Video Converter.
On the top, click on To MP4.
Select "Apple iPod - H.264 640x480".



On the bottom right, select these settings:



Convert.

You might want to "Save Current Setup as Profile" and give it a new name you can easily remember.

The reason this works, after much research, is because M4V movie playback is not broken...only MP4 was messed up.

Good luck. I just converted and played a movie just fine.

To: BlueSquares

Nice research and workaround

I suppose that's enouph just to select m4v iPod in File type option. Have not you tried to create m4v files with multi-channel sound and play them in iTunes/Apple TV?

Regards.

To: Vlad


I tried to create multi-channel with the original Apple TV default settings, but it still would not play in iTunes or Apple TV.
I haven't tried multi-channel with my workaround yet.

So far, stereo is more than enough for me.

To: BlueSquares

Thanks. Just want to know if multi-channel sound works in m4v...