I purchased ATV Flash approximately 1 week ago. I am able to write to a USB flash drive from the aTV disk image without problem. Everytime I insert the USB flash drive and reboot apple tv, I end up at a screen that asks for language selection followed with display resolution for apple TV. I pick 720p HD and then the Apple TV Restore screen comes up with three choices: 1) restart/reboot 2) run diagnostics or 3) factory restore. I have tried all choices without success.
I have tried using a 1 gb usb stick by PNY, Lexar and a 256 mb SD card with a SanDisk USB adapter without any success.