When you buy content from the iTunes store it is accessible from the Apple TV via iCloud without having to connect to your computer. However, when you convert the videos yourself to your iTunes Library those video will require that your Apple TV be able to connect with your iTunes Library, whether it be on a PC or Mac.

Setting up Home Sharing is different from simply using AirPlay. Instead of streaming your entire Mac screen to the Apple TV, it just streams the video or music. Also, there is no need to enable Airplay on your Mac and send the signal to your Apple TV. You can peruse the contents of your media collection from within the Apple TV, making finding that perfect Friday night movie easy to find from your couch.

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