The watch context manager now allows you to either provide a callback or do an explicit check afterwards (warning: this change is not backwards compatible, please update your fabfiles)
The services module now supports both upstart and traditional SysV-style /etc/init.d scripts (thanks to Selwin Ong)
The virtualenv context manager can now also be used with local() (thanks to khorn)
The supervisor module now uses update instead of reload to avoid unnecessary restarts (thanks to Dan Fairs)
Add support for OpenVZ containers (requires a kernel with OpenVZ patches)
pip can now use a download cache
Upgrade Redis version to 2.4.17
Misc bug fixes and improvements
Support for Ubuntu 12.04 LTS and Debian 6.0
Documentation improvements