It does sound like SP3, the next update, is going to be the one to finally address some of these issues in earnest. Apparently there were plenty of bugs left behind with the current release, including messed up networking support, excessive file buffering, some codec errors, wiping of some settings, broken watched/unwatched flagging, etc.

Apparently SP3 will also bring the ability to ignore "the" when sorting. But it's still as yet unknown (to me anyone not previewing that alpha/beta) how this is implemented. Some people were asking for ignoring of "A" as well, and I don't believe that would work very well as a default.

While this past release brought the ability to put your local collection front and center, it is still mixing online content within your content. However, instead of adding in new titles it's only doing this for episodes for TV shows - like the old betas worked. There don't seem to be any plans to stop doing this. It has its pluses and minuses, but the lack of labeling and clarity is what made it a huge PITA in the past - you didn't know which items were local nor which were sourced from the net (nor their quality).

I'm going to wait until SP3 before reconnecting the box - that should be here next week sometime.

And as much as I'd like to see the next update for Boxee, what I really want is the ladies of the iPhone Dev Team and their friends to stop bickering and talking about their curling irons long enough to release a new untethered Jailbreak for iPhone 4 already.