On the 2nd Gen AppleTV, Apple has dumped their Album Art Screen Saver. But there’s no reason to fall into despair, because I’ll tell you how to get it back:
Over at Dough’s Scripts, [UPDATE: Link veraltet] there is a free script that allows to export a copy of each album cover from your iTunes library into a folder on your computer. Then you just name the folder “Album Art” or something like that and select it as screensaver on your AppleTV 2.
Only drawback is that you have to manually update your Album Art folder every time you add new music to your library and want to have that cover shown as well.
Hopefully, Apple will someday give us back the Album Art Screen Saver.