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The two features I'm loving are Collections and Password Protection.
Collections has just made my Kindle so much more user-friendly. I'd only had it for about 6 weeks and already the list was 7 pages long, so being able to sort into Collections has made everything much easier to find. Yes, I'm a little bummed that subscriptions/feeds can't go into Collections, but I'm still facing 2 pages of info rather than 7 when I switch it on, so overall I'm very happy.
Also Password Protection is a godsend. My company wouldn't allow me to read proprietary documents until we had Password Protection, so this has really expanded the usefulness of my Kindle.
I find the Popular Highlights kind of amusing, but not really that helpful. I can't say I really care that much what other people found highlight-worthy about the book I'm reading. Isn't my opinion the most important in the world? Hmmm?
I don't know if this was part of the update or not, but the browser on my kindle has become more nimble too. Previously I wasn't able to do any real surfing on the web without crashing the Kindle and causing it to reboot, but now I can. (It's still way less spry than a netbook or iPad, but it's actually useable now.)
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