I am just going to post my experience.
I had a heck of a time getting the custom firmware restored without errors on my main PC which is a quad core running 64 bit vista but finally got it restored (without errors) and got XBMC installed. However, after tethered booting, no matter what I did, I could not get wifi or ethernet after it was tethered booted. I could even start up xbmc and navigate around but no network connectivity.
Finally, after tethered booting what seems like a million times. I decided I was going to start all over again and I restored the factory apple firmware. I had no problem getting the ireb app to say it was in dfu mode but could not get itunes to restore the custom firmware without getting errors 21, 1600, 1601, 2005, 2009, etc (exactly the same as the first time). So I decided to try my other computer in the house which is a very old AMD 2500 that I had put Windows 7 (32 bit) on. I again had no trouble getting into DFU mode and then it immediately restored the custom firmware with no issues on the first shot (I don't know if it was just luck or not). I installed xbmc and tethered booted it and had wifi first shot.
I'm hoping that by the time I need to reboot my atv2, that the untethered jailbreak will be out.
Just thought I'd post my experience for anyone else that struggled like I did. If you can stick with it and get it working the end result is awesome. I don't know if it didn't like something on my vista x64 machine or if I just had better luck with the dinosaur hardware running windows 7.
Huge thanks to everyone that makes this possible on such a small, quiet, (and cheap!) device. Although I haven't done tons of testing yet. I was able to stream a number of xvid's and 720p x264's without any issues over wifi-n. I was also able to watch an .strm file with an rtmp link in it without any issues.