Make sure you update the libraries from the arducopter trunk and the latest code from the ardupilotmega branch.
I have a lot of setup commands now. I may reduce and consolidate these soon.

Radio:
ch1 = roll
ch2 = pitch
ch3 = throttle
ch4 = yaw
ch5 = mode switch - use your 3 position switch
ch6 = used for tuning - not currently active, search for "rc_6" to enable
ch7 = use to set throttle hold value while hovering (quick toggle), hold > 5 seconds on ground to reset the accelerometer offsets.
ch8 = not used

setup:
erase  			- run this first, just in case
reset  			- run this second
radio  			- run this third
esc 			- just ignore this for now
level  			- optional - sets accelerometer offsets
flat   			- optional - sets accelerometer offsets to 0
modes  			- interactive setup for flight modes
pid    			- optional - writes default PID values to eeprom
frame  			- optional - default is "+"
enable_mag 		- enables the compass
disable_mag 	- disables the compass
compass      	- interactive setup for compass offsets
declination  	- usage: "declination 14.25"
show 			- shows all values

Flight modes to try:
stabilize  - yay
Alt_hold   - You need to set your throttle_cruise value by toggling ch_7 for less than 1 second. (Mine is 330), altitude is controlled by the throttle lever.
FBW 	   - Simulates GPS Hold with the sticks being the position offset. Manual Throttle.
position_hold - When selected, it will hold the current altitude, position and yaw. Yaw is user controllable. roll and pitch can be overridden with the radio.
RTL 		- not tested yet, will try and fly back to home at the current altitude.
Auto 		- not tested yet, i'm finishing a waypoint writing sketch and will be ready to test soon

- what's new
- CMD_ANGLE - will set the desired yaw with control of angle/second and direction.
- CMD_ALTITUDE - will send the copter up from current position to desired altitude
- CMD_R_WAYPOINT - is just like a waypoint but relative to home
- CMD_TRACK_WAYPOINT - coming soon, will point the copter at the waypoint no matter the position

Special note:
Any mode other than stabilize will cause the props to spin once the control switch is engaged.
The props will NOT spin in stabilize when throttle is in the off position, even when armed.
Arming is Yaw right for 1 sec, disarm is yaw left for 1 sec. Just give it some juice to confirm arming.
Good luck,
Jason