How Apple TV plays your iTunes library
Apple TV lets you enjoy your entire iTunes library on your home theater system. With Apple TV (2nd generation or later), you can stream content to Apple TV from any computer in your Home Sharing network. To stream content from a computer, the computer needs to be turned on (not in sleep mode) and iTunes needs to be open. Next, you need to set up Home Sharing to stream content to Apple TV.
For instructions on setting up your Apple TV, see the Apple TV Setup Guide.