For complete details you should read the Changelog

New Features

New extensions:
    - DAMAGE (FIXME: There're TWO sites about damage - http://freedesktop.org/Software/XDamage and http://freedesktop.org/Software/DamageEXT)
    - XFIXES
    - COMPOSITE (default off)
    - XEVIE (default off)
    - DMX (FIXME: default OFF?)
Extensions can be enabled/disabled from the configuration file and from
    command line ej: "startx -- +extension Composite" or
    Section "Extensions
        Option   "Composite"   "True"
    EndSection

Support for new Radeon chips: R420/M18, R423, RV370/M22, RV380/M24, RS300.

DRI update: Mesa 6.1
    - More OpenGL extensions
    - fbconfigs support
    - Beginnings of pbuffer support (indirect only, and only in specific
        circumstances

Radeon driver update:
    - DRI support for IGP chips
    - Merged Framebuffer support (dualhead with DRI)   
    - DynamicClocks option (reduced power usage)
    - Render acceleration (r100, r200 chips only)
        Acceleration of Render
           Disabled by default (FIXME: still true?), you need to add:
              Option   "RenderAccel"   "True"
           to your configuration file to enable it.
    - Support for new ATI chips (R420/M18, R423, RV370/M22, RV380/M24,    RS300)
    - Xv gamma correction
    - Updated 3D drivers

i810 driver updates
    - Dualhead support (i830+)
    - i915 support
    - New 3D driver (i830+)

Savage driver update:
    - Pseudocolor overlay mode

S3 driver updates:
    - Support for additional IBM RAMDACS

Merge Mach64 DRI support :
    - Add a new option, BuildDevelDRIDrivers, which controls whether
        DevelDRIDrivers is non-empty. DevelDRIDrivers contains those drivers
        aren't built by default either due to being unusable on that
        architecture (but buildable for testing) or due to security concerns,
        as in the mach64 and savage cases.
    - Merge the Mach64 DDX's DRI support, under the XF86DRI_DEVEL define,
        which is set only when BuildDevelDRIDrivers is set.

From MGA driver update:
    - Support for DDC and DPMS on second head on G400
    - Updated 3D driver

From the SiS driver update:
    Output device hotplugging
    HDTV support (480p, 480i, 720p, 1080i; 315/330 series)
    Added video blitter Xv adapter (315/330 series)
    Lots of fixes for 661, 741, 760
    Extended interface for SiSCtrl
    Extended LCD handling (allow more modes)
    Extended RENDER acceleration

Chips driver updates:
    - Improved BE support

Infrastructure for rotation support in drivers

Use of dlloader is now supported

Software cursor is now based in the Damage extension

New RenderAddTraps (Render is now at 0.9, Trapezoide code has been rewritten)

New Trapezoid implementation for Render

Faster software implementation of RENDER (using MMX)

New keyboard driver (you can still compile the old one with USE_DEPRECATED_KEYBOARD_DRIVER)
    You'll need to switch the Driver    "keyboard" to Driver    "kbd" on older configs

Support AMD64 on OpenBSD

From Xprint update:
    - Now xprint is included
    - OpenGL is now supported for printing
    - New set of maintenance tools for the Xprint server (xplsprinters, xprehashprinterlist, etc.)
    - Added new XprintUtils client library to make the usage off Xprint easier

Athena toolkit now has print support (XawPrintShell)
    - Various application/tools now have xprint support (FIXME: it was backed out?)
   
Fixes/Upgrades

Freetype upgraded to version 2.1.8

Xprint updates
    Lots of fixes from moxdev.org and Sun
   
Correctness fixes to Render framebuffer implementation

Updated x86emu and resynced with upstream at SciTech

Render implementation fixes

Features removed
Remove Speedo Font support
    Module speedo in section "Modules" is no longer needed, X.org will
    warn you that it can't load it if you use old configuration files.

Retire XTT font module and Freetype1 from X.org tree
    The functionality of XTT has been integrated into the Freetype
    font module and the old XTT1.x code (including Freetype in
    xc/extras/ is no longer needed anymore (Bug #595)

Know issues
Segfault when mixing new DRI and old libGL (#709)
DRI code in X.org tree is broken on big endian machines
Radeon driver not converted to use t_vertex yet (FIXME: not confirmed?)
Non-TCL drivers broken by Mesa changes (#716)
Know dlloader issues

Future features not included in this release
Modularization efforts / auto-tooling have been started, but it won't be included in this release because it wouldn't have been ready for this release, because the enormous amount of work and test need. You can see the ongoing efforts at http://debrix.freedesktop.org/

TrueType wrappers for bitmap fonts
    Wrappers convert .BDF fonts into .TTF fonts
    Huge disk space savings, eliminate font compilation step and improved performance
    More info

Xevie 1.1   
    modifications for redirection of input events to composited windows
    Update to 1.1 version, multiple client support -- where is this version currently?
    Security fixes suggested by Alan Coopersmith

Credits
The following people have helped to make this release posible, if someone is missing, it was not our intention.
(Special thanks to all the ocasional testers on IRC, mailing lists etc. who have helped to find and fix bugs)

Kristian Hogsberg (new keyboard driver changes)
Egbert Eich (x86emu update)
Keith Packard (New extensions, Render, software cursor changes
Eric Anholt (composite, DRI merge, Mach64 DRI, radeon updates, tons of other stuff)
Roland Mainz (xprint, remove old stuff, freetype,)
Adam Jackson (dlloader)
Soren Sandmann (software RENDER)
Alan Coopersmith
Russ Blaine
Alexander Gottwald
Alan Hourihane
Chisato Yamauchi
Nolan Leake
Stefan Dirsch
Rik Faith (DMX)
Daniel Berrange
Matthieu Herrb (AMD64 on OpenBSD)
John Heasley
Ryan Underwood
Alan Deucher
Ty Sarna
Torrey T Lyons Darwin
Stuart Kreitman (XEVIE)
Kevin E. Martin (DMX, configurable extensions)
Greg Parker (Input support on XDarwin)
John Harper (XDarwin)
Thomas Winischhofer (SiS driver updates)
Aaron Platner, NVIDIA (driver support for RandR rotation)