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I think that will work as long as you are using iTunes, and the external drive is where the iTunes library os located. I could be wrong, but I believe that ATV has to get its local content from your local iTunes (as opposed to the iTunes Music Store on the web). Brian

Just did the update myself. While I do not plan to rent many (or maybe ANY) movies, given the restrictions on the rental period, I did note something while browsing the list of available HD titles.... The Wrath of Kahn! yeah, I know it will probably not even approach HD Lite, but damn, its...