What Linux variants can be installed on an 1st generation Apple TV?
Solution 1:
The first generation Apple TV had a pretty low powered Intel CPU, as you can see in the specs here. So in theory, you should be able to run just about any Linux distro, just a question of how much hacking you're willing to do.
There are a bunch of resources for doing this, but a good one is at the atv-bootloader project. There are tools to create a nice USB stick that should do most of the work for you.
As for how useful it is, don't expect much for general purpose computing - after all it's a 1 GHz Pentium-M with 256 MB of RAM. But it may do reasonably well for some home theatre tasks, or if you need a home automation server or similar box.
Solution 2:
OpenElec 2.0 is made for ATV v1 and 2 and supports the newer HD encoder you can install.