After a great deal of trial and error, I wanted to post my findings on using portable (USB powered) drives with aTV Flash.
You can see the beginning of my odyssey in this message thread:
...but the short version is this: aTV Flash cannot smoothly playback iTunes HD videos, when the iTunes storage is on an external, USB powered drive.
Specifically, I am referring to HD television shows purchased from iTunes Store. I tried uninstalling everything 'extra', except nitoTV, with lots of rebooting and adjustments of the mPlayer cache values, enabling/disabling the Apple h.264 decoder, blah, blah, blah.
I even tried both Western Digital and Seagate external drives (WD Passport and Seagate FreeAgent), with exactly the same results. You *do* get some stuttering with SD content, but the HD TV shows seem to really aggravate the problem.
I was really confused, however, when I could smoothly play the same video *streaming* from iTunes on my Mac Mini, but when it was *sync'd* onto the external drive, I would see stuttering video.
So, I transitioned back to the internal Apple TV storage, re-synchronized my collection (well, a much smaller portion thereof) and everything plays without any stuttering at all.
Then, I started reinstalling things like Remote HD, et al., and everything works.