I think it is transcoding. It's a .mkv file. The server is connected via gigabit port. The Apple TV is wireless. I am watch stuff from the server now but is a .mp4 and I am having none of the same troubles.
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Server
MSI Z77A-G45 | Intel G530 65w | Kingston 8GB DDR3 | 4x Western Digital 2TB Green | Corsair BS 600w | Coolermaster 690II Adv. | Windows Home Server 2011
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