Two weeks after the release of second beta of iOS 4.2, Apple launched the third beta to developers together with the second beta of iTunes 10.1.

The latest beta contains an updated version of the modem firmware. The most significant change is that it pulled AirPlay from YouTube. While still available when viewing videos in Safari, the AirPlay button has vanished from the native YouTube app and is forcing testers to watch on the built-in screen.

A bug with the AirPrint functionality is included so that you can prints as just the size of the iPhone’s screen rather than the original image size. Besides, Apple adds new SMS tones for the first time. Instead of the classic bell, iPhone users can now have “Bloom,” “Choo Choo,” “Sherwood Forest,” “Telegraph” and several other tones for their SMS tone choice.