Same thing happened to me for a long time. Eventually, I FLIPPED OUT and hit update on my iPhone repeatedly, over and over, and suddenly it gave me the D/L and Install screen. :) I think there are just too many people trying to d/l, and then there are morons like me hitting the button over and over again. Sorry.
D/L'ed 11.1 from Apple. Installed fine, and the first screen I got was iTunes Radio. Messing around with it now. I've never used Pandora or anything, so this is a different experience for me.
EDIT: Ahh, ok. So, when it switches songs, it gives a little slide-in notification, like a Twitter msg. Cool.