Hacking was a term originally coined at MIT to descrive such classic pranks as emptying the deans office and reassembling it -- complete with rug -- in the middle of the frozen Charles River. (That illegal software thing is more properly called "cracking.") Hacking Apple TV is an entirely legal activity that makes it truly useful, starting with a bigger hard drive -- child's play for anyone reading this. A blog by the fine folks at makezine.com offer a fully illustrated tutorial called "Violating my Apple TV warranty in 4 easy steps."

Legal yes, warranty-voiding, yes, but seriously, dude. If you can find your way around a ribbon cable, you can do this. You should do this.
If you want to get really serious about hacking, like adding other applications (start with Firefox for browsing, Joost for free TV, and Quartz for added performance), the fine folks at the Tutorial Ninjas blog will happily help you out. Not child's play for everyone...but definitely a breeze for anyone who can use a command line in OS X.
This is just the very, very beginning of what's available from Apple TV hacks, with many more coming I'm sure. One of many blogs to keep up with Apple TV Hacks is (naturally enough) Apple TV Hacks. Another good one is AwkwardTV.
Note that ALL of these are blogs. When I tell people that virtually all of my time online NOT in The COW forums is at blogs, this kind of information is one of gazillions of reasons why. Blogs are where you'll find the best information breaking fastest -- one of gazillions of reasons why I'm so happy to see blogs at The COW.
Okay, final example of brilliant hacks presented via blogs, this time the Hack A Day blog. Decide in advance what you want to be drinking when you visit this page, because when you play the movie, you're going to laugh so hard that you'll eject said liquid through your nose. Appropriately enough, this hack is the robotic beer launching refrigerator. The movie takes a while to get interesting, but the accuracy tests will blow you away. THIS, friends, is a useful hack!
PS. re: MIT: you can get MIT's ENTIRE CURRICULUM, both undergrad and graduate, onine for free. It's the whole magilla: required reading lists, examples of student work, some (not all) classroom lectures, and more. Here's my pass/fail grading: the curriculum is awesome, but because MIT FAILS by only offering lectures in Real Media, you should PASS on those. But the curriculum is way cool.