While the complete change log of the latest PlayStation 3 update (v1.50) is still conspicuously absent from public eye, it's been widely reported that Sony has corrected the fugly resolution issues that plagued PS1 and PS2 titles (those not originally coded for 480p output) when played on the new rig. That's right, no more (unprecedented) artifacts and jaggies. Huzzah!
Note: the fix does not upscale the original resolutions of PS1 or PS2 games.
Update: PS3 Fanboy has posted a list of additional changes implemented by the update:
A personal image/photo can now be used with a user ID
Edy support added
'Operation Sound' added to sound settings
'Delete Backup Data' added to backup utilities
WEP128, WPA-PSK (TKIP), WPA-PSK(AES) can now utilize AOSS
Login password can be saved without setting the system to log in automatically