This new version accurately marks old tweets as read when the software starts, and adds "in reply to" IDs to @ messages so conversations can be more easily tracked.
Also, Twitterrific now uses the more secure HTTPS protocol to communicate with the Twitter servers. Using a proxy server is now more reliable, along with other changes to the network and communication foundation. A complete list of the changes is available on the Iconfactory website.
Twitterrific comes in two flavors: one is free, but supported by ads from The Deck, and the second removes the ads, but is $15. Twitterrific requires Mac OS X 10.4 or later, and a Twitter account (obviously).
The Iconfactory also recently started tweeting themselves, and you can find them at @iconfactory. In related news, remember that you can also follow @TUAW for updates above and beyond what you read on our site, along with tweets from all our contributors, too.