Engadget shows us how to swap out your Apple TV's HD
Ban Drawbaugh over at our sister site Engadget has a fantastic tutorial up about upgrading your Apple TV's harddrive. As David pointed out, the stock 40 gig harddrive just isn't going to cut it for most people (my iPod is 80 gigs for goodness sake). Ben uses the Terminal to do the drive cloning (though I imagine for those of you who avoid the Terminal I am sure you could use Carbon Copy Cloner) and iPartition to resize the media partition.
Go forth and hack!