I think I fixed mine without doing a restore. On mine, it seemed like I couldn't get past the menu and when I clicked "continue" on the What's New screen with the Apple Remote, nothing would happen except the Apple TV LED would blink. I was about to restore it, but wondered if the update unlinked my remote somehow. Since I was able to still connect to the Apple TV via the iPhone remote app, I used the app to click continue. Nothing happened immediately so I just kept using the app to keep clicking on "Continue". Eventually it loaded up to the Home Screen. However, the Apple remote was still not working but I could use the app to navigate.
With the app, I went to settings>general>remote and unpaired the apple remote. Then, I held the menu button and the right arrow on the apple remote for 6+ seconds. An icon of a remote appeared at the top left and an animation of two chains linking appeared...indicating the remote should be linked. I started using the remote and it finally worked. To see if this worked, I then held the menu button and the down arrow for 6+ seconds until the Apple TV LED started blinking. I let go of the buttons and Apple TV restarted and booted to the What's New screen again. I used the newly paired Apple Remote to click continue and it immediately loaded to the Home Screen without issue. Hopefully it's fixed for good.
So, if possible, try to unlink and relink your Apple Remote.