Apple TV2 Remote not working

Question

My Apple TV2 stopped responding to the IR remote all of a sudden. The white LED would blink with every button press, but nothing would happen. I was able to pair the Apple TV's remote with my Macbook Pro, and it worked fine. My old plastic IR remote, which still works with my MBP also displayed the same behavior with the Apple TV.

The Apple TV did respond to the iOS remote app, so that's not the problem either.