Apple has released iOS 4.2 beta 3 to developers. The last beta of iOS 4.2 was released about two weeks ago. The release of iOS 4.2 is scheduled for next month. There is maybe one or two more beta releases before iOS 4.2 gets out.
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According to MacRumors iOS 4.2 beta 3 improve performance and adds minor features like new tones for SMS, iPad alert settings and minor graphics changes.The AirPlay feature is supposedly missing in this beta build. Why Apple has removed it for now is unclear. There is no way that Apple will not have AirPlay in the final iOS 4.2 release in November. They rather delay iOS 4.2. AirPlay got already heavily pushed by Apple and should also help Apple TV sales.