Two new features I can think of right now are decoration previews in the kcontrol module, and improved focus stealing prevention (i.e. other windows won't interrupt work while you're working with the active window).

After the Nove Hrady conference, the only working window "decoration" was a thick red border with a grey square acting as the close button, and it also locked up from time to time. However, there are many places in kwin_iii that have been rewritten in order to clean it up (so cleaning up the KWin core was the reason). This in turn allows fixing many bugs (I even had kwin bug less than #20000 that simply wasn't possible to fix before), and implementing new features, both that will come in KDE3.2 and that will come later. One of the "features" should be also updating KWin's and in general KDE's support for the EWMH (a.k.a. NETWM) window manager spec, and "official" support for running KDE with other window manager than KWin.

Important part of the rewrite (heh, ok, looks I called it sometimes a rewrite after all) was the new API for the decoration styles, as the old one has probably never meant to be public API (very closely coupled with all internals of KWin core, so the whole application had to stay binary compatible - acceptable for libraries, but annoying for application, as it was limiting the development). This has the unfortunate effect that old decoration styles won't work with KWin in KDE3.2, but the other possibility was limited KWin development for several KDE releases (note that the decision about kwin_iii came about a year ago, when absolutely nothing was known about KDE4). The new decorations API should be properly documented, and there should be hopefully also some porting HOWTO - decoration developers can join the kwin@kde.org mailing list if they have questions.