Western Digital has released a firmware update for the WD TV. The new firmware brings the version up to 1.02. Below are some of the major changes made in the update:

Enhanced cover art, album art, and thumbnail support for media files and folders
Additional subtitle languages and decoding support
Improved media playback and navigation
More audio formats for MKV container
Fixed bugs reported by the WD TV user community

More details can be found in the official release notes (PDF) and you can download the update from Western Digital's website.