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Here is a much quicker way to install the update onto the ATV 3:

Download one of these depending on which version you have:

ATV 3: http://appldnld.apple.com/iOS8/031-05613.20140917.R9AQa/AppleTV3,1_7.0_12A365b_Restore.ipsw

ATV 3 (New): http://appldnld.apple.com/iOS8/031-05663.20140917.n2Zd6/AppleTV3,2_7.0_12A365b_Restore.ipsw

Plug into your computer with micro usb cable and plug in the power lead.

With option key held down, press restore button in iTunes, select the file you downloaded, restore and when it finishes updating, remove the leads.

All done in 10 min.

It is much faster this way than waiting for the server which can take hours.

I have been trying two days and can't even download these files. Are there any other servers I can get this file from?
 
I finally got it installed via the itunes methoD posted above. If your using windows, just hold down the "shift" key instead of the "option" key when you click on restore.

I had to get the file from someone that post it on a generic file server, I had no luck with the apple links.

the only downside of the itunes method is you have to redo all your settings again.
 
Rumors surfacing that Homekit was part of this update. This apple smart home thing may be really happening. Give us new hardware! I beggeth.
 
What's a mess

Beats worked the first hour, after that, no. AirPlay is spotty and many YouTubes won't play. iTunes on my computer comes and goes. Only a tiny fraction of my iTunes library shows up.

Was flawless before this update. Never had this many problems with an Apple update ever.
 
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