I am having similar problems with my ATV v1 refusing to show up in iTunes as a device. I now have had 2 network techs that suggest that Bonjour is the likely candidate specifically on this, the version B1 of the router. I have tested, reloaded, repaired, downgraded itunes. I reloaded XP Pro on my wife's PC, loaded iTunes 9.0.2 where I knew I had flawless connections. No go.! All PCs and Apple TV from and to router ping perfectly. I had the ATV v 1. tested at the Mac store and it connected right away on their itunes.
Based on reviews of prior versions, I had great expectations for this router but I have spent far too long trying to get it to work for this. I am not tech savy enough with routers and networks and maybe if I knew more I could navigate the features of this router to find a fix. Although I know enough to realize plug and play does not always work, most people have that expectation. I have not upated to the latest firmware yet so I have that to try.
I plan on testing a new Linksys E2000 or similar very soon. If that works, the 655 will go back in the box as a failed experiment.