GUI:

Improved XBMC GUI Skinning Framework making it even more flexible and powerful
Powerbutton follows “shutdown function” in settings/system/power saving
Updated translations for most languages (help is always wanted with translation)
Skinnable Weather Plugin API enabling third-party Weather Plugins (Python Scripts)
Edit button for RSS feeds in settings, (needs RssTicker script installed, see SCRIPTS section below)
New screensaver option to turn off the screen (using VESA DPMS)
Always On Top option to advancedsettings.xml when XBMC runs in Windowed Mode
Better support for multi-monitor setups
Settings have been re-organized and cleaned up to sync with new features

Playback:

High Definition, Surround Sound, and Subtitle Flagging and Filtering in Video Library
Added support for SingStar and UltraStar Karaoke Lyrics Format
Updated FFmpeg (libavformat and libavcodec) audio/video codec and demux library
Speed up RAW image loading and handle more file extensions
Implemented better WAV/PCM handling on 64-bit operating-systems
Added support for additional tags in CUE sheets (Genre/Year)
Added support for MPL2 (Blu-ray) subtitles format
Added support forVPlayer subtitles format (which unfortunately is still in use)
Added support for RTMP (Flash) live video streams, plus skip, pause, and resume feature
Added proper MMS/MMSH streaming client (libmms) support
Added audio and subtitle delay pop-up to the GUI (similar to volume control)
Improved Commercial Skipping, EDL (Edit Decision List), and SceneMarker support
Options for smoother video playback (syncing the video to the refresh rate of the display)
Smart Playlists support for video resolution, aspect-ratio, codec, audio, and subtitles
Extension of ExternalPlayer enabling multiple external players based on file-extension
Added overlay renderer for dvd/vobsub/xsub

Library:

Performance improvements to SQLite (database) queries (help is always wanted here)
Support for movie sets and a sortorder tag in the Video Library
UPnP MediaServer compliant with DLNA (Digital Living Network Alliance) standards
Ability to view pictures over UPnP in XBMC, also loads of fixes to the UPnP library
Added scan for new content command to HTTP API, extended XBMC.updatelibrary call
Reorganized MythTV directory structure to separate TV Shows from Movies
Support importing MythTV movies into the Movies Library (including scraping)
Added support local actor thumbnails (store as actor_name.tbn under .actors directory)
Scrape studio info for TV Show/Season/Episode, info is available via studio field item
Changed handling in Scrapers and NFO replacing «thumbs» with multiple «thumb»
Added library update on resume if we are coming from suspend/hibernate
Ability to scrape and scan TV Shows into the video library by air-date via TheTVDB.com

Scrapers:

TheMovieDB.org (TMDB) movie scraper upgraded to version 2.1
Added Movie Trailer scraping from dtrailer.com to TheMovieDB.org scraper
TheTVDB.com TV Shows scraper scraper improvements and enhancements
MTV (Music Videos) scraper improvements and enhancements
New freebase music scraper (with Artist FanArt support via htbackdrops.com)
New Polish music scraper combining allmusic.com,merlin.pl, and lastfm.pl
New mymovies.dk (Multilanguage) movie scraper (*commercial)
New fdb.pl (Polish) movie scraper
New cinefacts.de (German) movie scraper
New filmdelta.se (Swedish) movie scraper
New world-art.ru (Russian) movie scraper
Updated daum (Korean) movie scraper
Updated imdb.cn (Chinese) movie scraper
New cine-passion (French/English) movie scraper
Fixes and additions for the mymovies.xml scraper

Skins:

Confluence is the new default
PM3.HD set to secondary
Removed legacy PM III (farewell old friend)

Windows-Specific:

Changed from Open GL to DirectX for GUI and video rendering.
Added Crash Dump for Windows
Support Milkdrop visualizations

Linux-Specific:

Added support for Debian building and packaging to the XBMC SVN
External libraries options when compiling XBMC for Linux making it more distro agnostic
Support for PPC (PowerPC) processors in XBMC for Linux (OpenGL support required)
Avahi Zeroconf (Zero Configuration Networking) for XBMC webserver
Added DeviceKit.Disks integration
Added DeviceKit.Power and ConsoleKit.Manager integration

OS X Specific:

Logitech Harmony Universal Remote support
Added support for CoreAudio API and removed the PortAudio API code
AC3 and DTS digital audio pass-through to SP/DIF on Apple TV (thanks to CoreAudio)
Support for running external Applescripts
Support for command-tab application switching
support for OS X Spaces (virtual desktops)

Live-Specific:

New installer with disk partitioning support, network setup and language selection
Uses Beatzeps08’s variation of duduke’s great “spinner black” usplash theme! Thanks Beatzeps08!!
Based on Ubuntu Karmic
NVIDIA drivers: 190.53 (VDPAU included on supported GPUs)
ATI/AMD drivers: Catalyst 9.11
Includes the magic tvheadend package, which brings live TV in XBMCLive
The plugin “SVN Repo Installer” is also included, thus installing new scripts/plugins/skins will be easier