Assuming you will be using an external DAC and not the analogue outs, I would go with the Wadia. I did a fair amount of research on this and found some decent threads on Head-fi.org from people who had owned both. The general drift of the comparisons was that the sound quality of the Apple TV was not as good as the Wadia iTransport, falling short in terms of resolution. (It also has only an optical digital output, which is generally regarded as inferior to coaxial and seems to be losing favor among some DAC manufacturers.) Obviously, the Apple TV has greater functionality for home theater, but for two channel audio I decided to go with the Wadia and have been very happy with it. I don't find the lack of a menu on the Wadia to be a big hassle...just create a playlist on the iPod, plug the iPod into the Wadia, and select the playlist.
