The USB patcher is really easy to use, but unfortunately like you said to create the stick itself you need to use a intel mac (running tiger). After the installation all new changes can be made by connecting using SSH.
The NitoTV is using both mplayer and native quicktime player, when the patchstick is applied it also installs perian that gives native support for almost any format available.
There is a great wiki with information about patching the AppleTV here: http://wiki.awkwardtv.org/
It is working with 740p on my tv but that is the highest resolution I can get, it might be possible to get even higher resolution.