Videora Apple TV Converter is a free video converter. It is available both for Mac OS X and Windows. The converter is almost identical in both platforms. It uses HTML-based wizards to guide you through the conversion process. It even shows screenshots of relevant windows during the process, although those screenshots were made with the Windows version of the app. You can use this converter to convert your media files from a variety of formats to H.264 and MPEG-4 files, both of which can be played on the AppleTV natively. There are two conversion modes. The basic mode asks you more questions and does without the technicalities to make the process easier. The advanced mode lets you customize the process more, but asks you about formats, frame rates, etc.
In my testing, I converted an MKV file into H.264. The source file was a minute long and it had a resolution of 720p. The conversion process took less than 2 minutes and when it finished, the file was added to iTunes automatically, from where you can stream it to your AppleTV.
In short, Videora Apple TV Converter is a nice free converter. The only bad thing about it is that the screenshots are from the Windows, but that is not a big deal.