Since Apple released iOS 5.1.1 for the Apple TV last week alongside iTunes 11, many users have reported problems updating to the new software over an ethernet connection. This appears to be the result of nasty bug in the latest Apple TV OS. Some Apple TVs even failed to boot back up after the update wouldn’t stick.
If you’ve been having problems updating to 5.1.1 on your Apple TV, then try updating over a Wi-Fi connection or manually restoring in iTunes.
TidBITS suggested not updating over Ethernet after enough users started seeing problems:
The solution is to unplug the Ethernet cable and update over Wi-Fi. That has worked for many people for whom the update wouldn’t install. However, if your install failed such that the Apple TV won’t boot at all, you can manually restore the Apple TV by unplugging the power and HDMI cables, and connecting it to your computer with a micro USB cable (for a third-generation Apple TV, you’ll have to reconnect the power cable after this).
Downloading and applying the update in iTunes 11 should work just fine, but a simple update over Wi-Fi should also work in most cases (although it will take longer). The good news is that this looks like an isolated glitch in the 5.1.1 update process. After applying the update, Ethernet should work just fine on your Apple TV.
The Apple TV 5.1.1 update features Up Next compatibility for iTunes 11’s new music queuing feature and a number of other bug fixes.