You should select ATD prescaler so that busclock divided by prescaler is not higher than 2MHz (see ATD specs) and not less than 0.5MHz (again see ATD specs).
Suppose you use 8MHz crystal and no PLL. Then busclock is 4MHz. You can divide this at least by 2 and 2MHz. At the other hand you can divide 4MHz bus clock not more than 8 times, 4MHz /8=0.5MHz.
In datasheet table 8-8 you may see that Prescale Value bits are from binary 00000 to 00011.