Does that mean that you just use the NetFlix feature or the movies and TV shows from the main menu?
To stream movies, music and more to your ATV, its quite simple...
In iTunes go to Advanced and Turn ON Home Sharing
On your Apple TV enter your Apple ID (the same as your iTunes log on)
Enter your password for iTunes
Then you should see the following menu choices horizontally across the TV screen from the Apple TV
-- Movies (these are the movies direct from Apple)
-- TV Shows (also direct from Apple)
-- Internet (this is where you see NetFlix, MLB.TV, NBA etc)
-- Computers (you should see "My Library" or whatever you have it named)
-- Settings
Under the Computers menu choice you should see your library, open that and you'll see a vertical menu with choices like Music, Movies, Rentals, TV Shows, Podcasts, etc..so pick one
You should see your selection appear and you select it and voila, its playing on your TV
I rip a lot of movies with Handbrake and drop them into iTunes and they all appear right there doing the exact steps I just told you. watch and enjoy
As for YOUR pictures being the Screensaver, its a little more involved, so next post I will detail how to do that
Hope this helps