You can see the full changelog here. Below are some highlights that benefit from some comment about how they affect our server right now.

• In F3 debug, added the cardinal direction indicating the direction the player is facing. Notch changed cardinal directions after beta, so some areas still refer to North as what is now West. We may have to finally concede to the new directions for clarity.
• Mobs, items and projectiles now pass through nether portals. This is currently disabled in Craftbukkit until it’s fixed, as it was crashing servers.
• Added Witch Huts and witches in swamps. Like any new generation features, these will only appear in outworlds. I have no plans for a new main world for this version.
• Carrots and potatoes can now be found growing in villages. These also drop as rare drops from zombies, but you can find some in the market as well to start your own farm.
• New Anvil used for repairing and combining enchanted items as well as for renaming any item/block for experience levels. Currently can’t be protected with Deadbolt or I think WorldGuard.
• Flower Pots let players plant all kinds of saplings, mushrooms, flowers and cacti, dead shrubs and ferns. There is currently a bug with fast-break blocks like pots (mushrooms, grass, flowers, vines, etc). Sometimes it’ll instantly break the block behind it as well. It will drop the item for that block assuming you’re using a tool that can harvest that item. Be careful. Do not break pots on top of diamond blocks with your bear hands, for instance.
• New Item Frames. These can be buggy, since they work really differently than most blocks, but they’re now protected by WorldGuard.
• Mob Heads are very rarely dropped when mobs are killed by players. Currently only wither heads drop. Though I’m not sure if Wither Skeletons will spawn properly in our main world nethers. I restricted the ability to place them in the main worlds to make Withers for Nether Stars. This will only be enabled in outworlds to protect from destruction. Exceptions can be made on a case by case basis.
• Buttons now stay active for 0.2 seconds longer. This may affect some contraptions that depend on the button press length.
• New maps. These may be buggy still. But when/if they work, I’ll be adjusting some pixel art so that we can have some custom maps for item frame pictures that we can share.
• Leather Armor Can now be dyed in 16777215 different colors. We’ll be using this in some pvp games no doubt.
• Zombies & Skeletons will now rarely spawn with armor of all kinds, sometimes enchanted. If it’s possible, I’d like to enable zombies to spawn with jackolanterns like during Halloween, since we missed that.
• Right-clicking a villager zombie under the influence of a Weakness potion with a golden apple will invert their potion effect, make them wiggle slightly and eventually turn back into a villager. I know some of you were trying to get some villagers. This is a solution to that.
• Slimes now spawn in swamps at night. Since these spawns are affected by light level, I’ll be adding them to the list of denied mob spawns in flagged regions. Players will have to re-add the flag, though, to activate it.