I've upgraded to the Alpha version of the next Ubuntu release and have some insight into the changes that are being made. Here's a quick list of what I've seen so far.
Evince Document Viewer
The default PDF viewer will have support for forms. Good news for those people who don't want to install the dog Adobe calls Acrobat Reader. There will also be annotation and multiple-page per sheet printing.
Evolution Personal Information Manager
Better spam handling and a Google calendar backend may actually bring me back from my all-online-PIM life.
The Gimp Image Editor
The Gimp is an old stand-by of the Linux world, and the father of the Gnome desktop. Many people complain about the interface, but I don't often have problems with it. The Gimp has stayed on version 2.2 for a couple of years now, but there's a major rewrite and UI cleanup due in 2.4. Ubuntu 7.10 has started shipping the development version of The Gimp, with 2.4 scheduled to be in when they both go gold. The new icons make seeing what's going on a little easier.
F-Spot Picture Manager
I'm writing an introduction piece about this software right now (in the style of the movie and music entries last month). It's a nice piece of work. I'm not as familiar with it, so I might miss some of the new features. The photo editing tools are better now, with horizon adjustment, soft focus, and auto-color adjustment.
GAIM ... er ... Pidgin
Making me feel right at home (Hawaiian), GAIM has been renamed to Pidgin due to a suit from AOL. The interface has been cleaned up and it offers more stability. One of the major additions due in the next version is implementation of the MySpaceIM protocol. Since the MySpace client is only available on Windows, this will allowfolks that I know to chat with each other. I won't affect me one little bit, though.
Gnome has Telepathy
Gnome is starting to integrate IM, voice, and video chat at the deepest levels of the desktop. You can now have panel applets to chat with your most common contacts. Soon, any application will easily integrate voice or video chat. Your Evolution addressbook will double as your IM contact list. Cool beans!
This is a standards-based softphone which operates in a manner similar to Skype. The rates for landline calls are cheaper, too, but it can't contact any Skype members because Skype uses a closed protocol. Version 3.0 will see a completely new interface, with the ability to see whether contacts are online, available, on a call, etc. This is a feature which has been sorely missing. Complete audio and video support are also due. Can I make a request for a test call like Skype's?
Sound and Video
The movie player (Totem) is seeing more work done on automatically locating and installing codecs for you. GStreamer, the backend for the player, is seeing quite a few upgrades. There is a new plugin for making annotations on the screen.
Rhythmbox Music Player
The player is still sleek and easy to use, but it has seen some minor upgrades. The Jamendo and Magnatune store listings have been moved to their own section of the sidebar, "Stores." The are auto playlists for top rated, recently added, and highest ranked songs. Most interestingly for my friends, the is MTP support in the new version, meaning they can just drag and drop songs to their iRiver Clix without having to run a script afterward.
There are probably a million thing under the surface which I haven't touched on, but the major players are getting enough of a facelift that 7.10 looks to be a must-have upgrade for anyone using 7.04.