We aren't really talking about the features of this release, yet, since we want people to focus on testing (to make sure we didn't break anything). But here's a rough breakdown of the code that's in:

New Selector Engine (Sizzle: http://github.com/jeresig/sizzle/tree/master). Much faster than previous engine, going to be in many of the major libraries.

No more browser sniffing (currently being discussed here: http://www.reddit.com/r/programming/comments/7l2mr/jquery_re...).

.closest() method - extremely useful for event delegation.

    // Returns this or closest ancestor that matches selector
    $(this).closest("div");

.live() - Super-simple event delegation.

    // Will handle clicks on all elements that match selector
    // even if new ones are added later
    $("#foo > div").live("click", someFn);

.offset() rewrite - significantly faster, uses no browser sniffing.

.hide()/.show() rewrite - 50% - 200% faster.

.append/prepend/before/after rewrite - 10-15x faster.

While the biggest feature of this release is performance, the new event delegation methods are going to be super-useful.

As to jQuery UI - there are multiple teams within the jQuery project - the core jQuery team works on the jQuery library and the jQuery UI team works on jQuery UI. In their last update (about a week ago) the UI team said that UI 1.6 final was going to be out before the end of the month.