“So my best guess is that Apple really wanted to ship iOS 4.2 in November — especially for the sake of the iPad — and some features didn’t make the cut. Widespread AirPlay video support, I suspect is one of those things — and that we’ll see a lot more places where AirPlay works for video in future iOS updates.”

Daring Fireball: Video Support for AirPlay Is Limited in iOS 4.2

So this maybe true, programmers often run out of time but I think that this is missing the elephant in the room.

I love AirTunes (the old name for AirPlay) and have used it for years. I’ve two AirPort Expresses at home and they’re in use almost every day. However…

I’ve stopped recommending it to friends because it’s so flaky. Too often I’ve sold it on a friend for it to not work. And this is just music, not video.

My guess is that they assumed that they could build on the existing stack of software and have found that it’s not up to the job. I’m expecting that 4.3 will come with a new version of iTunes, new Express fireware, new router firmware etc. This probably won’t work properly till well into next year.