I decided to increase the size of my new 160Gb AppleTV storage with an external HDD but first I tried a small HDD as a test. The small HDD was recognised and synced OK with iTunes. I then purchased a WD My Book Elite 1Tb HDD and formatted it to Mac OS. I reversed the ‘install’ procedure, removed the small HDD and installed the WD My Book but it is not recognised with the capacity of the ATV shown in iTunes remaining as that without an external HDD. I then re-installed the smaller HDD but it also is not recognised. Grateful of assistance please.
Problem solved which appears may have been related to the preinstalled virtual software that came with the WD HDD. Erased disc, reset ATV to factory settings and reloaded with latest (3.0.2) then updated aTV Flash with 4.1 and reinstalled HDD and recognised and synched immediately.
Yes, some of the preinstalled software that comes on the WD and Seagate can cause issues such as this.