Menus overlaying - not responding

Hi since updating to the second 6.0 software download on my ATV 3.1 I am having trouble with menus and playback.

Basically the first time I go in I can search to a video (Vimeo or Youtube ) or to TV Shows on my computer. Remote works fine until contenet playing then no ability to pause or stop the playback.

Plus hitting the menu button just overlays the menu in a "see- through" mode on top of whats ever playing back.

Have tried restarting a few times and pairing the remote.

I couldnt get it to restore as the menus got so overlayed I couldnt select the right option.

I should know this but is their a manual factory reset option?

I'm using a 2 TB Timecapsule (latest model) to stream wifi (and will just add that since version 6 software the wifi has been suffering interference as well....)

Tired of this Apple - whats the point of an ecosystem if when I have it set it up ok you screw it up.....