Cooliris, the Kleiner Perkins-backed startup that creates a three-dimensional wall for exploring images and other media, has become more personalized with the latest release of its browser extension. This is another smart step that moves Cooliris closer to becoming a real alternative to the traditional browsing experience and away from being just a cool toy.

The biggest improvement is the addition of a “favorites” function, which does exactly what it sounds like — lets you save content to a personal wall. You can use this in several ways. The personal wall can just be a random collection of cool images and videos, basically a list of visual bookmarks. You can also use your favorites to build a playlist of sorts, say of music videos or episodes from a specific TV show. Cooliris also added preferences, so you can customize the browsing experience by altering the speed at which you scroll through the wall or choosing the background image behind it.

Neither of these additions are all that conceptually innovative, and the implementation is occasionally clunky. (For example, when you choose a background, there’s no button to upload images from your desktop; you have to type in the location.) But they’re still important, and speak to the vision that Cooliris is becoming a browser within your browser — so like any other browser, the experience has to be tweaked to your needs.

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[Update: Apparently there’s a “browse” button for uploading images in Safari and Internet Explorer, just not in Firefox. Cooliris is working on Firefox, too.]

Poking around Cooliris also hints at some of the ways the startup hopes to make money — there’s now a channel for holiday shopping, and the company presumably gets a cut from the purchases. (The screenshot above shows the holiday channel, but it’s a nice illustration of how you could customize Cooliris, too.)

The Palo Alto, Calif. company released an iPhone app a couple months ago, which works really well — indeed, scrolling through the 3D wall feels actually much more intuitive using the iPhone’s touchscreen than my laptop’s mouse.

You can also embed a Cooliris wall on your web site, so users don’t need to install the extension to use it. Behind the jump, you can see the wall I posted back in September to illustrate the concept.