The (accepted) answer is only partially correct.
The USB drive of the Apple TV has no official use at the moment of this writing.
To be able to use it, you will have to hack your Apple TV. This required you to make a bootable USB stick (called a "patchstick", there are programs to automate the process, it's easy) and power cycle the Apple TV with the USB stick plugged in. More info here: http://wiki.awkwardtv.org/wiki/PatchStickBuilder
Then, you can enable the USB port in a variety of ways, the easiest of which is to install nitoTV. Advanced stuff includes installing boxee or XBMC on your device.
The Awkward TV wiki http://wiki.awkwardtv.org/wiki/Index.html holds much more information.
I'm a happy Apple TV user myself, it's much more useful when "patched". That does require you to do some tinkering every now and then. If you're somewhat comfortable with a Terminal window and/or able to follow instructions, you'll be fine.