People familiar with "Apple TV 5.4 Seed 3" said it fixes a number of issues, including problems that would cause tracks to skip or music to fail to start over AirPlay. An issue with iTunes Radio that could cause the Apple TV to crash, and a bug that would cause audio volume to increase dramatically during AirPlay use have also been fixed.
Apple notified developers that they can now use an iOS 7 device to set up an Apple TV after restoring or resetting all settings. This ability is not available on an iPhone 4 or iPad 2.
The release notes accompanying the third beta of Apple TV 5.4 reportedly do not include any known issues with the pre-release software.
As for iTunes 11.1 beta 1, the minor update includes support for Apple's new iTunes Radio service. Previously, developers were only able to test this function on a device running iOS 7.
iTunes Radio is set to launch this fall, offering free ad-supported streaming in a fashion similar to Pandora.
Update: Subsequent testing from German blog Schimanke.com reportedly shows the latest Apple TV 5.4 beta brings back music purchasing capabilities via iTunes.