If you're going to use Apple TV and have an iPhone or iPod touch, do yourself a huge favor and get the free Remote app [iTunes Link]. You will get a lot more mileage out of the device because it makes it so incredibly easy to navigate through the system. If you have the Remote app, be sure to upgrade it when you install 3.0. You'll thank yourself for it.
Speaking of navigation, I'm very pleased with the new layout of 3.0. Everything is right there for your immediate perusal and responsiveness is much, much quicker than with previous versions of the software. This was something Steve noticed himself, and seems to be getting an overall positive nod from those who've tried out the update.
I bought my second-ever movie over iTunes to play with the extras. I wasn't very happy with the initial selection. Most of the movies I wouldn't care to own, and if I ever downloaded Twilight I'd have to burn the hardware. So, I went with Wall-E, a favorite of mine. If you've already purchased movies and want to watch them over Apple TV, you need to download a new version of the extras -- same goes for iTunes LPs. I followed this handy advice from iLounge and synced the movie plus extras directly to the Apple TV's hard drive.
Then the fun began. At first, it felt like I was really going through a DVD. Wall-E's extras aren't all of the ones included with the DVD, such as the free Pixar short, but it was still a lot. There was also content specific to iTunes that was a nice bonus. You could easily spend a couple hours going through all the extras. But, then, I got stuck on the extras sub-menu and couldn't navigate away. I got the movie to play, but when I exited out of it, it took me back to that persnickety menu. I dug out my small white Apple remote and used it. Nothing. I used the Remote app to jump to an anime episode under the TV menu. It streamed, but the music from the Wall-E extras played over it as well. When I exited out of the show, it took me straight back to the iTunes Extras submenu. I finally had to unplug the Apple TV just to get out of the movie. I tried again, using just the Apple remote, got stuck once more, and gave up. I later tried resyncing the extras, but iTunes froze and I had to abort the task.
Internet radio was a different story entirely. Browsing and connecting to stations was a breeze and I've had music playing in the background for most of the past day. Genius Mixes were equally easy. If I had iTunes connected, music was selected from my entire library. If iTunes was closed, it utilized music just available on the Apple TV hard drive.
When struggling with iTunes Extras, I noticed a tab under my Apple TV settings in iTunes for iTunes U. I downloaded a class and synced it over, fully expecting to see an iTunes U tab for the Apple TV. Nada. I sighed, and rebooted both iTunes and the Apple TV. Still nothing. It took going back to iLounge to find out that the iTunes U content is lumped in under your Movies and Music depending on the class content. I'm extremely disappointed that iTunes U didn't get its own menu somewhere in the upgrade.
Overall, the upgrade is a mixed bag. It's a lot easier to navigate through the menus of the device. Internet radio is such a beautiful thing, and those two improvements alone are worth the upgrade. Provided Apple can work out the kinks with iTunes Extras, I see this definitely driving more people toward downloading some movies versus DVD. But, for now, if you want to play with Extras, do so through iTunes itself. In the meantime, I'm eager to see how third-party developers will add their own flavor to this upgrade. Who knows, maybe in the process they might be able to fix iTunes Extras.