Shroud of the Avatar update is a biggun! It features a new combat sigil, which shows off the eight combat schools that a Warrior may choose to follow. There's also a story sneak peek from co-authors Richard Garriott and Tracy Hickman as well as player housing basements.
This last bit is a pretty big deal judging by the number of screenshots and verbiage Portalarium devoted to it. And while we're talking about housing, there are also some nifty shots of the game's Druid tree house as well as related discussion from devs Isaac Oster and Michael Hutchison.