So I bought my parents a Macbook Pro this week and they really like it. My mom just wants to watch movies and view photos. Im thinking of buying an Apple Tv so they can view stuff on our HD tv. But from what ive read I can't connect the external HDD (has all our pictures and movies on it) to the Apple TV and stream it :\
Sure you can, I do.
Apple TV can only play your media content if its in iTunes, and Apple TVs are super picky about file formatting. I use Handbrake to re-encode the video files, it has presets for both generations of Apple TV. Then just drop your files into iTunes for playback on your Apple TV. If you want your movies on an external HDD, you'll have to have your whole iTunes library on that external HDD.
This latest version of iTunes now puts these non-iTunes Store movies into a new category, "Home Videos," or something like that. My latest Apple TV system update no longer describes my connected iTunes library under, "My Movies," they've been moved to a new "Sharing" category.