Interesting addition to the story here.
SlingMedia is now saying that AT&T never worked with them to further modify the program and that the discussions referred to in the above announcement never happened. The slingplayer mobile program for iPhone 3G network use was never additionally modified from its conception and it always varied its video quality based on the bandwidth available. AT&T has since modified the announcement removing references to discussion about optimizing the slingplayer mobile program.
http://www.macrumors.com/2010/02/05/sling-media-denies-collaboration-with-atandt-on-3g-streaming/
So...AT&T, while now allowing the program to work over 3G on the iPhone...is now lying about how it came to that decision in its press releases? Speculation is that this is to set precedent and imply that other companies need to work closely with AT&T when they design their programs in the future that rely on heavy data use of their network.
Hmmmmm......AT&T is really a piece of work aren't they?