By far the most important new feature is the improved authentication. Moodle can now "hook in" to a wide variety of external user databases via LDAP, IMAP, POP3, NNTP and direct database access (in addition to the existing "internal" methods). Other fields (such as email, full name etc) can also be automatically copied from LDAP and database servers. All of this can all be easily configured using a nice new admin GUI.
Other new goodies include resubmittable assignments and a fresh new Norwegian translation!
There's much more in this release. For full details see the release notes, or swing over to the download page.