Version 3.5 is a major release offering lots of new features, including support for new web technologies, better performance, and improved ease of use.  Highlights include:

• The world’s first implementation of HTML5 audio and video support (Ogg Vorbis and Ogg Theora).
• Performance improvements making this version more than twice as fast as Firefox 3.
• More customization opportunities for the Awesome Bar, including new autocomplete keystrokes and better keyword searches.
• Location-aware browsing that allows users to share their location with requesting websites.  This feature can be used to obtain more relevant information and save time while searching.
• Expanded privacy options, including a private browsing mode.
• Upgrades to anti-phishing and anti-malware technologies.
• Multi-touch gestures for OS X and Windows 7, allowing for easier navigation.

Many more features are included or improved upon in this new version.  You can read all about the release here.