The FireCore developer team has created a program much like the iPad PwnageTool for your Apple TV. This tool is dubbed the name Seas0nPass and will work on your 2nd generation Apple TV, it creates custom firmware file to load and install non-Apple approved apps. This jailbreak requires tethering for boot of your Apple TV, much like your other iOS 4.2.1 Apple TV jailbreaks. Hopefully the tethering will go away once iOS 4.3 is launched.
"Currently the jailbreak for the 4.1.1 (iOS 4.2.1) software is ‘tethered’. A tethered jailbreak requires the AppleTV to be connected to a computer for a brief moment during startup."
Seas0nPass Download, Mac OS X 10.6 (No windows version yet)
If you need instructions...there is a very simple guide for seas0npass at FireCore
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