If i Tunes fails to find a valid signature, it will display the following error message: ) is not reachable.
My first thought upon realizing the problem was "oh no, Apple must have blocked this; I should find a way to redirect traffic to another server which does approve it." It turned out that the exact opposite was true: I had run Tiny Umbrella, a program designed to backup the SHSH files. There is an option in the program called "Set Hosts to Cydia on Exit", which adjusts the (a machine under control by the Cydia developers.
Make sure that one of the first things you do it to change this password (and store it in your Key Chain, so you don't forget! Cydia is a user-interface for apt-get for your jailbroken your i Phone or i Pad. Unfortunately, it only seem to list junk software, mostly thousands of ugly themes from five sources (including Big boss and zodttd). Even if you jailbroken your Apple TV, it will check for Software Updates.
I recommend that you trash these sources: The Firecore source was add after I bought the a TV Flash (black) software. If an update is available, you are presented with a menu where you can select between "Update Now" and "Update Later".
If you are running Linux or Windows, it seems that the redsn0w software by the dev team (of course not the real i Phone developer team, but a bunch of clever hackers who call themselves like that) is able to install IPSW files without the help of i Tunes.
There is no guarantee that this policy will never change in the future.
For this reason, many sites recommend to make backups of the so-called SHSH files.
After the Apple TV is connected to your computer, press and hold the menu and play buttons on the Apple TV' remote for 7 seconds.
After that, release the buttons, and the light on your Apple TV should flash rapidly. Note that the above is referred to as a tethered jailbreak, since you actually connect the Apple TV to your computer.
I recommend to ignore the terminology, and simply follow the instructions in the how-to at i Clarified's Jailbreak wizard.