If you watch any 1.8 video, make it this one, in which Notch himself runs through the new features which will be present in 1.8. If you can’t be bothered with such things, here’s a list I compiled from the video.
1.8 Feature List
New / Larger Biomes
Creative mode with access to all block types and the ability to fly
Faster day / night transitions
NPC villages (no actual NPC’s as yet)
Abandoned underground mines / strongholds
New explosion graphics
In less exciting news, Notch also announces in this video that the 1.8 ‘Adventure Update’ won’t actually come out in a single update, but in at least two updates, the first of which will be available in a couple of weeks.