1 It's not.
It has its moments, but it's not as funny as AMVh3:TM.  Of course, that was one of the classic moments in AMVs... it'd be hard to even come close to it.
However, it IS funnier than AMVh:CE.

2

Hmm. Guess I'll find out this afternoon. I had Azureus running in the background last night when Neverwinter Nights coughed up a BSOD. I walked away to do something else while the bastard booted and never got back to it before going to bed. 

Sometimes I'll just fire up AMV Hell 3 off google video for background noise at work. (Yes, I do where earbuds, otherwise people would look at me funn-ier)

3

Yeah, having now seen, I'd have to agree. It's just not up to the previous standard.

I think a large part of the problem is the audio choices made by most of the entrants.

AMVh 3 had a good mix of different audio types. There were snippets of commercials, funny sound clips, and well-known music. In the few cases where a more obscure or even original piece of audio was used, it was at least audible.

That's where AMVh 4 falls flat. People made a lot more use of modern and obscure music, most of which borders on white-noise with no clearly audible lyrics. That, and every third entry was some angst-piece based on Death Note.