For those of you interested, I recently purchased a 4TB G-Drive and so far have it running with no issues on my first generation TV. Its going to take the better part of a day to finish the media transfer so I can't really judge the playback yet.
What type of drive are you using? We've never been able to get anything larger than 2TB recognized on the AppleTV.
It's a G-Raid 4TB drive and it took more like two days to do the initial transfer of around 2TB of data, but its working perfectly on my Apple TV. This is the link to the companies product page: http://www.g-technology.com/products/g-raid.cfm
I've been using the drive on my original AppleTV for about two weeks. First thing is the drive does not spin down when attached to the AppleTV, this was actually my biggest concern as the G-Drives can take anywhere from 6-10 seconds to wake once they do. It was unbearable with the ATV2, especially when watching 22 minute TV shows. Even with the drive spinning constantly and tucked behind a hot TV its aluminum case remains cool, the drive does spin down when you put the ATV into standby mode. The playback was on par with my original 2TB drive which was a Western Digital, it does have the occasional stutter during playback that the other drive suffered from as well. I'm relieved the original ATV flash can support this 4TB drive, I was getting desperate and streaming to the ATV2 was horrible, until FireCore enables external drive support for ATV2 I'll stick with my first gen box.
So this may help some of you out there. I have a few ATV Gen 1 and dumbly but 3tb hard drives for them all before reading on the site that the 2 tb was apparently the max. Though formatted the right way the ATV failed to configure the 3tb for Primary storage.
I came up with a solution to make them work. In that the ATV actually could read the hard drive it seemed weird to me that I couldnt get this to work on any of the ATV or the 3TB hard drives. I previously had a 1 tb hard drive attached to the ATV. I tried cloning the 1tb hard drive to the 3 tb hard drive and just plugged it directly back in to the ATV. The Apple TV has had no problems reading the 3tb hard drive once cloned from the old 1tb as a primary drive. Just in case any of you wanted to know.