This weekend I decided to set up Debian on my AppleTV because the experience for most things relating to video is far better on the XBox 360, for a lower price More here
The first thing that you need to do is back up the device, which requires a specially created USB drive that can be toggled into recovery mode using “menu” and “-” on the apple remote. The ATV-bootloader guys have taken care of making a tool to generate that drive called ATV USB Creator. The only tricky part here is that if a bootloader drive is made on the mac, both partitions are HFS+. The second one can be reformatted to whatever, such as ext3 for backup. The details of backing up the ATV and restoring it are on the ATV Wiki.