I've just read that my license is going to expire but I can get free updates if I pay more money. Does this mean I won't be able to use my ATV2 or will I just not get updates?
You will be able to install updates made available through the Maintenance menu still. However if you have to rejailbreak for whatever reason you will not have aTV Flash available to install.
Ok, so I pay the $30 extra to upgrade - Is the current version untethered and stable?
It is untethered (however this has nothing to do with aTV Flash). I haven't had any issues with stability. The rare occurrence but that is about it.
Stay in the loop with new product announcements and updates.