Version 3 is in BETA. Things might break.
Upgrading from V1 to V3 is NOT mandatory nor is there any urgency to do so. We will continue to support the V1 plugin, although we will not be adding new features to the plugin. The new Factory interface will contine to support Version 1 feed file downloads (Go to Store > Store Menu > Download Store > For Plugin Version 1.x). That file is in the correct format for the V1 plugin to process. We will continue to provide a link to the V1 file format for as long as there are still V1 stores.

We do, however, recommend that if you are creating a new store that you use Datafeedr Version 3 unless you desperately need one of the features that is not available in V3.
Things to keep in mind
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You need to upgrade your WordPress version to at least version 3.x.
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Product IDs & category IDs have ALL changed. If you have written any PHP logic into your site which analyzes IDs, those will fail.
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All category and product management has been moved out of the plugin and into the factory.
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Previously dripped products will be broken. V3 does not support V1 dripped products in any way.
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We've revamped all widgets. Your widgets will need to be re-added to your sidebar.
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Unless great care is taken, your URLs will be changed, though they will all issue 301 redirect header messages to the search engines. (More info: http://www.google.com/support/webmasters/bin/answer.py?hl=en&answer=93633 )
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The Datafeedr V3 file format will not work with services having their own Datafeedr import feature such as ShopperPress,... until they update their services.
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We've updated our requirements: http://www.datafeedr.com/requirements/
Things that don't exist yet
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Tracking clickthroughs
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Tracking product views
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Adding custom products
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Specifying Redirect URL on 404's
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Attributes have been completely removed (and will not be added again)
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Embed product icon (DR icon) in post interface (it's possible to embed a product in post using [DFR] shortcodes)
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No Datafeedr Pages widget (will not be added again as it's easily reproducible using WP's menu system)
Things that will not be ported from V1 to V3
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Custom product names, descriptions and other manual product info edits
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Custom "no-image", "Buy Now" and "More Details" images
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Category images, descriptions
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New categories created through the Datafeedr V1 plugin interface
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Affiliate IDs
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V1 referrer tracking info
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Products that were dripped in V1 will be dripped again if drip is enabled in V3
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Custom pages