The Combo updater is “MacOSXUpdCombo10.4.9Intel.dmg”. I really don´t know, whether this is downloaded on the fly in newer versions of nitoTV. “In the old days :-)” you had to place it manually (via ftp or ssh) in the frontrow/documents folder.
first thing for you to do should be to look for that file in mentioned folder. without that there is no dvd playback! If it´s missing, get it from apple (link is almost certain in the knowledgebase) and run the smart installer once more. this also enables usb support.
recovery.dmg is discussed in many other threads. it´s basically part of the 1.0 firmware of the atv and not openly distributed. if present it enables afp via smart installer which is pretty cool also it is known to help playing .iso files but there aren´t much infos about that. so you can go without it for playing video_ts folders. ~/movies/“movie-name”/video_ts or “usb-root”/“movie-name”/video_ts should do it.
What version of nito was installed with patchstick? I guess 0.65. If you updated to 0.70 you may be in trouble. I had to reset the atv and patch it again. If you have not updated to 0.70 leave it that way until you got the other things working. Keyboard should be working after smart installer with combo (thus turning usb support on).
Important: I was wrong with me having a ntfs drive up and running. it is fat32. i would recommend hfs+ but then again you are in the windows world.