“The Apple TV can now receive audio from iTunes, as an AirTunes device, just like an AirPort Express… Apple TV’s will now appear in iTunes output menu… It works just like a standard AirPort Express units,” Paul reports for Rogue Amoeba.
“However, this AirTunes functionality is one-way -the Apple TV can not send audio to AirPort Express units. It functions only as a receiver, not a transmitter, at least currently,” Paul reports.
“When receiving audio from iTunes as an AirTunes device, the Apple TV [displays information right on your TV screen], including song, artist and album name, as well album artwork where available,” Paul reports.
“The Apple Remote remotely controls the copy of iTunes that’s sending to the Apple TV, as reported here. When the Apple TV is receiving and in AirTunes mode, the Apple Remote allows you to pause and skip tracks,” Paul reports.
The iTunes Preference “Allow iTunes control from remote speakers” is located “in the Advanced section -> General tab, and it appears to be off by default. Prior to now, this preference only applied to Keyspan’s hardware, and was always a bit odd. Anyhow, turn it on and the remote will control iTunes, through the Apple TV,” Paul reports.
“Right now Airfoil 3, our tool for sending audio to hardware all around your house, also sees the Apple TV as an output. It displays it as an AirPort Express unit for now, and you can even send audio to it,” Paul reports. “However, it does not properly handle this audio, because the receiving method differs from that of a standard AirPort Express. The specifics of network encryption used by the Airport Express appear to differ on the Apple TV. Thus, at this time, Airfoil 3 is not able to work as desired with the Apple TV.”
“We’re currently working to get the Apple TV and Airfoil talking to one another fully, and we’ve already got the Apple TV experimentally receiving audio from development builds of Airfoil,” Paul reports.
More in the full article, including screenshots, here.