Apple has released iOS 4.3 for iPhone 4, 3GS, iPod Touch 4G, 3G and iPad 2, 1 with a lot of new features. You can download iOS 4.3 via links below according to your iDevice requirement.
Following methid will guide you about how to jailbreak Apple TV with Seas0nPass jailbreak tool, which can create custom firmware like PwnageTool. Currently the jailbreak for the 4.2 (iOS 4.3) software is ‘tethered’. A tethered jailbreak requires the AppleTV to be connected to a computer for a brief moment during startup. Seas0nPass makes this as easy as possible, but do not proceed unless you are comfortable with this process.