Downloaded 3GS & ATV iOS last night from http://www.felixbruns.de/iPod/firmware/ on a very slow connection also around 20-30kbps without a hiccup. Maybe try give it a go.
Talking about Airplay I installed iTunes 10.1 to get the Airplay function from Mac-->ATV2 going until 4.2 is out for iOS devices but it's a no go. Looks like ATV2 software needs an update maybe? :confused:
http://www.9to5mac.com/35426/apple-releases-itunes-10-1
Its a tough one, as a rule i try never buy first generation of anything. I'm trying very hard to put off buying an ipad and wait for the 2nd generation which I hope will have more iphone 4 capabilities. A forward facing cam would be great for me. But yes easier said than done.