With firmware 1.07.18 both my brand new 3rd Gen WD TV Live units (PN WDBHG70000BK-HESN) keep rebooting (once every few minutes) while compiling media library in the background. It seems like this is due to a buffer overflow or similar due to the large size of the media library.
In between reboots, while unit is operational all functions work and media is streamable.
Under the .wd_tv folder under the 12TB Seagate BlackArmor network drive the library index size does not seem to pass 8.8MB for file wdtv.cas2.
P.S. My 2nd Gen WD TV HD Live units work just fine.