5.1.1 proved to be a nightmare for my Apple TV3. It was only a month & a half old.
Once I downgraded back to 5.0.2, everything worked again...for about a day and a half. I spent 2 days perusing forums trying everything, including using ethernet after it initially worked flawlessly using wifi. Finally, when it wouldn't even recognize my apple ID & password (iTunes would with no problem), I'd had enough. I rarely buy extended warranties but after being told these gadgets break down far too often, I did. It was the best $14 investment I've made. The store dude didn't even blink, just told me to go pick out a new one. So far, it's working fine. I hope it lasts, I'd be pretty miffed to find myself with a useless $100 shiny black paper weight.
Apple really needs to come clean about this and get it fixed.