I just got the update and can't wait to try it out. Officially licensed music videos streamed to your HDTV through the Apple TV for free. Way cool. I sure hope the quality is nice.
I currently have 4.3 beta 3 installed on my TV and let me tell you, your in for a tremendous treat. The quality is great and the process is extremely fluid. You won't be disappointed. Like I said in another thread, this AirPlay thing is going to get allot of TV's sold if most 3rd party developers jump onboard. I can't wait to stream MLB to the big screen from my iPad.
Check your network, my stuff is being plastered on a 56 inch 1080p TV and looks similar to Netflix HD. I'm pretty sure the service is adaptive, I have a 40mbps connection and i'm telling you it looks better on my TV than it does on my iPad.
Now that is some very good news. This cheap little device is really turning out to be something special. Now if MLB.tv and NFL Sunday Ticket for the iPad enable Airplay that's going to really make my jaw drop.