[HOW-TO] - Watch .avi formated Videos in Apple TV 2

• At first I managed to install XBMC on my Jailbroken Apple TV 2 correctly.

• But I am unable to correctly install the Video sources.
• However, below is how I do it on my Macbook Air.

• You�ll need a jailbroken AppleTV and either the Boxee or XBMC apps. I prefer XBMC because I like its simpler and modern interface. Boxee is too bloated and I hardly use it.

• First, you�ll need to set up your Mac OS X (please go elsewhere for help on Windows; I�m a strict Mac user) to support SMB networking. To do so, launch your Mac OS X�s System Preferences -> Sharing -> (Tick) File Sharing -> Option -> (Tick) Share files and folder using SMB (Windows), and tick your user account followed by entering an access password of your choice. Congrats, you have enabled your Mac OS X�s SMB support!

• Next, you�ll tell OS X which folder or folders you want to allow Sharing, ie, give access to XBMC. Let�s share the �Downloads� folder where you are keeping your .avi/.wmv/.rmvb etc files. From the Finder, select the �Downloads� folder and right-click to select �Get Info�. In the pop-up Get Info window, tick the �Shared folder� check box under the �General� section, and you�re done.
• Repeat for any other folders you want to give XBMC access to. Although you can share an entire hard disk but I suggest you do not do that as both XBMC and Boxee will take seemingly forever to scan the huge contents! Just add individual Share points/folders for better management and privacy.
• To watch a .rmvb in the �Downloads� folder using XBMC, simply launch your AppleTV�s XBMC app from the �Launcher� menu and select �Videos� from the options. You should now see a list of folders except the �Downloads� folder because you haven�t added it.
• Let�s add it now; select Add Source -> Browse -> Windows network (SMB) [you'll probably need to scroll down to see it] -> WORKGROUP -> Your Mac -> Highlight the �Downloads� folder -> Confirm it by selecting �OK� [press the left "prev. track" button on the Remote]. Finally give it a nice name and save it. Done.
• Do note that when you enable a folder, you also enable every sub-folders within it. To exclude a sub-folder, �Get Info� on it and un-tick the �Shared folder� option for it.
• You can now select the newly added �Downloads� folder from the list, locate the .rmvb file and play it on your big screen TV!
• While watching any video, pressing and holding the �Play/Pause� button for a few seconds will drop down a Controller where you can control the video, make adjustments to its audio and video settings etc. Press �Menu� to dismiss it. You can also press the +/- buttons to adjust the volume, the left/right buttons to rewind/fast forward (press again to adjust the rate of change between 2X to 16X.)
• To exit XBMC, press �Menu� until you return to XBMC Home screen. Then press the left button to go down to the �Power� menu� and select �Exit� from the options.

Source: How to Watch non-MP4 videos in Apple TV