While most of the updates in 1.2 are "behind the scenes," the biggest user-facing improvement is in the upgrade to 64-bit. What this means is that for Snow Leopard users, selecting the Growl preference pane does not require Preferences.app to re-launch in 32-bit compatibility mode.
In addition to the Growl preference pane, GrowlMail and GrowlSafari have been updated to 64-bit and are now Snow Leopard compatible. Further, the Growl framework has been re-written in Cocoa dropping support for the Carbon-based API.
You can see the full list of changes over at Growl's version history page. Growl users should have received a notification to download the update. Alternatively, you can head over to Growl's homepage and click "download" to get your ticket to the notification express.
*Several readers have pointed out that version 1.2, while the current version, wasn't released today but in fact has been out for several weeks. Our apologies.