I used ATV USB Creator to jailbreak my 1st gen ATV. I was able to remove all menus that I wanted by deleting the entries from the info.plist files. All, that is, except the 'All HD' item under TV shows. Why can't I delete it? It did not have an entry in the plist like all the others.
The 'All HD' menu (along with many others) apparently is loaded dynamically over the internet (presumably via a connection to the itunes store). If your Apple Tv is not connected to the internet this menu (along with others) will not show up.