While technically it is possible to install Silverlight, the process is very convoluted and when finally enabled the video playback is less than ideal. This is due to the AppleTV’s limited processing power (1GHz processor & 256mb of RAM).
In addtition to the Silverlight plugin itself the following components must also be located and installed for Silverlight to function properly. Due to licensing restrictions they cannot be included with the aTV Flash package.
Intel Tiger (10.4.7-10.4.11) CoreAudioKit.framework
The following missing fonts
/Library/Fonts/Arial Bold Italic.ttf
/Library/Fonts/Comic Sans MS Bold.ttf
/Library/Fonts/Comic Sans MS.ttf
/Library/Fonts/Courier New Bold Italic.ttf
/Library/Fonts/Courier New Bold.ttf
/Library/Fonts/Courier New Italic.ttf
/Library/Fonts/Georgia Bold Italic.ttf
/Library/Fonts/Trebuchet MS Bold Italic.ttf
/Library/Fonts/Trebuchet MS Bold.ttf
/Library/Fonts/Trebuchet MS Italic.ttf
/Library/Fonts/Verdana Bold Italic.ttf
/Library/Fonts/Microsoft/Lucida Sans Unicode.ttf