One of my Apple TV's started really flaking out when I moved it from one room to another.

It started:
Locking up often
showing crazy colors when video plays
show dotted lines down the screen
freezing video, but the audio continued.

I did:
a complete restore from scratch
upgraded/downgraded firmware
switched all cables
changed the location in which it was sitting (heat)

Finally I went to the Apple store and bought a new one to try. Plugged the new one in using the existing cables and it works fine.

So what do I do with the one that's freaking out? I'm sure it's no longer on warranty and I didn't get AppleCare.

Can it be fixed? Is it worth the money? Do I just recycle it?

Terry, have you looked into the video ports? Is it possible that dust/lint/crud got into the ports when it was disconnected? Tiny things can cause great problems. Don't ask how I know. Let's just say something strange happened with a cordless phone.

It's OK Terry, just use it as the new guest room's Apple TV. It'll be a good excuse to charge an extra $50 bucks for one that's working.

Sounds like a heat/video issue. Something is probably messed up good in the video circuits. I guess it can't hurt to ask what it costs to fix, but I'm guessing it's headed for the recycle bin.

It also can't hurt to try blowing it out with compressed air, just in case it has some crud in it it, as Phyl suggested.

Does it work anywhere? Does it work in its old location?

Given that all you did was move the unit, it would be worth opening it and checking for dislodged components or connections before making a decision on recycling.

This is well within the capabilities of Beckman, Cutler, or McGuire.

I would like a shot at repairing this if you are actually "Out of Warranty". Part of me wonders if the HD is the issue.