To be honest, the update was quite esoteric, improving title compatibility (for CAT1 and CAT2 titles?), adding audio codec transcoding (WMA Pro is the VC1 of audio codecs?), improving network support (there was network support?), and the requisite bug squashing and performance improvements. The wonks at AVS Forums are busy poring over the update, debating the relative merits of this audio codec to that audio codec, so head over there if you're so inclined. We just hope our copies of The Matrix Trilogy -- well, the first one at least -- play flawlessly when they drop later this month.
Read - Andy Pennel's Blog
Read - AVS Forums HD DVD update feedback