According to Apple, "this update includes the latest available software for each model of iPod or iPod mini." It also adds support for the new features of the fourth generation iPod, officially announced Monday.
New features for fourth-generation iPods include the ability to shuffle songs with one click, create multiple On-The-Go playlists, delete songs from On-The-Go playlists, select reading playback speed for audiobooks, hear the clicker user interface sound through headphones, charge via the USB 2.0 connection, and improved playback performance.
For users of the iPod with a Dock connector and iPod mini, enhancements include compatibility with iTunes 4.5 or later and the iTunes Music Store, improved playback performance, and support for the Apple Lossless Encoder, to enable compressed music encoding at high quality.
Updates for the iPod without a Dock connector include compatibility with iTunes 4.5 or later and the iTunes Music Store and improved playback performance.