1st I want to say I freaking love my apple TV it is well within one of my best purchases in a long time. Netflix, streaming movies, pictures, airplay from my iOS devices. All of these are firmly in the 'hell yes' category for me.
That said, there are certain things that IMO are automatic deal breakers for me when we're talking audio. On the top of that list is anything with a switching power supply. They introduce a ton of noise that will have huge determental effects on a digital signal or analog signal. They also introduce noise into the AC it is plugged into and can pollute your audio chain through other components. It's not a gauranteed thing, but it's something that I've measured using a an AC noise sniffer. Every place I had a wall wart or device with an internal switching supply there was a notable increase in line noise every time. unplug it and the noise goes away.
Now regarding my experience with the sonics of a switching power supply, most recently my squeezebox sounds like garbage with the switching power supply. Compared to my Sony sacd player it is no contest the CDP sounds much better on redbook through analog vs the digital on the Squeezebox and the analog on the Sony is terrible. When I get rid of the switching power supply it is a night and day difference. It surpasses the sony in every way and that's just changing the power supply. Mind you that the squeezebox is only being used via the digital output.
The Apple TV has the same exact issues as the stock Squeezebox + the spdif conversion to optical. That can't be a good thing. Perhaps the ATV is better than the stock Squeezebox, but I bet the farm it sounds better with a good linear power supply. The optical output is not the major issue with the ATV, the PS is. That said there is no reason the optical can't sound good, it's just not my first choice option for audio.
Stu, you clearly like the ATV and that's excellent, I really am glad you like it. I might be jaded, but I have some preconceptions regarding these sort of things because I have had negative experiences revolving around these things. Like I said before I am willing to give the ATV a shot as a source it should be very easy, I just need to find a Opt to Coax converter. I will report my findings and try to keep an open mind.