Right, hope the following helps - as already stated by others ATV2 is for streaming media not for downloading and saving as no HD. Again as already stated you can download much the same content and "save" it to iTunes. It is then simply a matter of streaming that content from iTunes on Mac or PC etc. direct to ATV2, wireless or ethernet makes little difference, it works a treat. You can also "mirror" from an iPad/iPhone etc. content such as BBC iPlayer, 4OD, iTV.com 5 or Sky Go through ATV2 onto your large panel TV.
There is also another nifty little option that doesn't include having to JB your ATV in order to play other media such as downloaded YouTube flash content, and that is Air Video. First download Air Video server and install on your Mac, then install Air Video app on your iPad (available for less than a couple of quid from the app store). Once you have done this your Mac acts as a server and you can watch your other media either on your iPad/iPhone or send it through to ATV2 and watch it on your TV. This app converts media on the fly, the quality on your 42" TV is just as good as watching it on your Mac.
Enjoy.