First of all, the software can now read PDF files. I tried it out with a TV manual downloaded from the website of manufacturer I support in my day job, and it worked pretty well, including drop-down access to the table of contents. Of course, there are many other ways to read PDFs on iOS by now, including GoodReader, iBooks, Stanza, and Safari itself, but the Kindle Reader at least does it simply and well. People who are in the habit of reaching for the Kindle app first will undoubtedly be happy to be able to use it for PDFs, too.
The other change is a bit more important, however: for the first time, the app allows (almost) the same access to periodical subscriptions as the hardware Kindle. (The “almost” comes in if you have a subscription to something, such as the New York Times, that specifically only allows direct Kindle hardware integration.) This is one of the major hardware features that has been noticeably absent from Kindle apps, and it will undoubtedly come as a welcome addition for those who use it on their readers and had wanted to on their iOS devices.
I just noticed something else about the Kindle app that I imagine it has had for a while and I just never noticed: the ability to sideload your own DRM-free content onto it (and pull downloaded content off of it) through the iTunes apps tab. I never noticed this before, though I hadn’t looked in a while. Of course, for all I know it may have had it since sideloading through iTunes was even possible; I just know that its lack was something I complained about when the app first launched.