No, the AF requirements are the same with version III. It's the camera though, not the converter. At this time only 1D series bodies will AF with reporting converters on f5.6 lenses.
Surprisingly, Canon's new 1DX will not focus with those combinations either.
There are choices though. You can put tape over three pins on the conveter and the camera will not know it's attached. That way it will still AF.
You can buy a cheaper, non-reporting converter, and the camera will still AF.
Both choices usually require good lighting and contrasty subjects to AF reliably. It will work, just not as good as the bare lens. The best results will be in good lighting.
The image quality does take a hit. Not terribly, but not everyone is happy with it. Some say it's acceptable to them, some don't. It's a personal choice.
I've used both choices along with using that combo on my 1D cameras. The imgage quality is generally "good enough" for most photo usage. In my opinion the AF inconsistency when using a non reporting converter is a bigger issue. It almost requires good lighting and/or contrast.