The mesh editing system has been greatly refactored, much of it rewritten from the ground up. Faces are no longer limited to three or four sides, which allow for a much wider range of modeling tools and workflows.
Faces are no longer limited to three or four-sides. This allows for a much greater number of modeling tools and workflows, and is especially beneficial to box modeling. Modifying topological flow is much easier, as you can remove geometry without creating holes in the mesh.
The vertex connect tool (currently temporarily bound to ykey) connects selected vertices within the same face with edges, splitting the face. UVs and vertex colors are handled correctly, making this a very useful tool for manipulating topology.
The face creation tool (fkey) no longer pops up a menu. Instead, it either dissolves faces, creates faces from a collection of wire edges (an "edge net"), creates a triangle or a quad from three or four vertices, or creates an edge from two vertices. Only one of these actions occurs, depending on context.
The dissolve tool (accessible from the delete menu) removes geometry without creating holes in the mesh. It has three modes, depending on which selection mode you are in.
In face selection mode, it merges adjacent selected faces, removing interior vertices. In edge selection mode, it merges adjacent faces with a selected edge between them. In vertex selection mode, it removes vertices and the edges around them, creating ngons.
Creating triangles when subdividing a single edge is now an option in subdivide, and is off by default. You can also disable grid filling (subdividing all edges of a face) if desired as well.
The merge and collapse tools work as they do in 2.49, though they now support collapsing vcol data, as well as UVs. They also work on all UV/vcol layers, instead of just the active UV layer.