I've installed PMC for Windows on ATV1 with Ubuntu 10.04_desktop and wine.
I had to recompile wine_v1.3 (!!), because there are no binaries for my environment to download anymore in this version and I wanted to compile wine for exactly the hardware and OS I use.
Because ATV1 only has 256MB RAM, You'll have to get a fast hdd (for example a SLC-SSD-drive) because of the swap-partition.
By removing many of unused preinstalled files, programs (office, dev-files, ....) and the tools You need to compile wine (!) it's possible to store Ubuntu_10.04 with wine and a 512MB swap partition on a 8GB drive, so You have the possibility to buy an internal (IDE) drive with a budget of 80€ (be careful to buy SLC, not MLC (which would be much too slow)) - there will be enough space to install spotify, too (with wine or the preview for linux, both versions do their job).
At the moment I use an external SATA-SSD drive on USB; it also works with an 5400rpm internal drive, but much slower.
I have decided to put the system on an internal drive because It's very much safer to do this and I think a little bit faster.
If You've installed everything and it works, do make a backup of the whole disk (for example with the command "dd" on an external system) - this is an important point.
I think this constellation is useable for music only; I haven't tested videos, so I don't know, but I'm pretty sure....
I also would use a USB-Hub to connect keyboard, mouse and an external soundcard with a good quality, the internal does work, but....
So, that's it.
Have a nice day,