I was wondering what the easiest, most bug-free, install of linux
would be?  I see instructions for Karmic around but hear that Hardy is
the most bug free option.

Ubuntu 8.04.

I have only been able to get Karmic up and running, as far as starting
automatically, but no video over Component and a few other pains in
the ass.

You looked here http://code.google.com/p/atv-bootloader/wiki/atvdisplay . There are specific setting to enabled video over Component.

What version of linux are you using on your A-TV?  and what would be
the easiest method of installation?  Netboot or using a USB cd rom for
installation?

Ubuntu 8.04.
http://code.google.com/p/atv-bootloader/wiki/InstallingLinux


Any help would be great, I'm actually on the verge of getting a Revo
1600 to replace this thing, but I don't want to on account of my wife
would kick my ass for spending the money, lol.

If you have an existing Linux box, first prep the AppleTV drive (make partitions, etc) first, then install Linux to it. Then move to AppleTV.

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