HOW-TO:Install XBMC on Apple TV 1 (Linux)

Apple TV 1 (silver) is no longer available from Apple, but can be purchased from alternative sources (eBay, kijiji, craigslist, etc.).

It is highly recommended that you replace the WiFi card with a Broadcom Crystal HD to enable playback of HD videos.

Crystalbuntu

 * See also: Crystalbuntu

Crystalbuntu has easy to use installers for Linux, Mac, and Windows:  http://www.crystalbuntu.com/download/ 

OpenELEC

 * See also: OpenELEC

OpenELEC is a fully-featured but highly optimized Linux OS created solely to run XBMC on the mk1 AppleTV and other HTPC systems. OpenELEC provides a set-top-box like XBMC experience; with a controlled Linux environment that puts simplicity, reliability and performance ahead of the users ability to tweak/customize (and break) the underlying OS. OpenELEC can be installed to a USB stick or the internal hard drive; allowing you to run an optimised XBMC installation alongside the original Apple OS or replace it completely.

OpenELEC has an excellent guide for installing on mk1 Apple TV's here: Installing OpenELEC on AppleTV