Reading the changelog I tried to pick the most important changes between versions 1.0 and 1.2. Please complete the list if I forgot something important.
Single player
- new tutorial
- new campaigns: Two Brothers, The South Guard, Under the Burning Suns
- changes in existing campaigns: new scenarios, dialogs, items
- removed campaign: Son of the Black Eye
- bonus victory objectives
Multiplayer
- turn time limit
- new maps
- improved messages: whisper, mute
- banning by IP address
- more info in lobby: scenario, era, map size
Game rules
- new "swarm" attack
- changed "slow" attack
- new terrain types: Mushroom Grove, Rockbound Cave, Illuminated Cave Floor, Great Tree
- new unit: Goblin Rouser
- unit balancing
Graphics
- team colors
- new portraits
- new animation types: dying, leading, swimming, walking, custom
- new attack buttons
- improved terrain graphics: encampment, tropical forest
- a hero icon
- progress bar when loading
Music
- new music
- new unit sounds
Localization
- right-to-left language support
- new translations (providing a list could be misleading - a few of them are less than 10% on core packages complete)
Development
- custom abilities
- custom unit stats modification
- more detailed events: advance, hit, miss
- new WML language features
- scripting custom AI in Python
Support
- improved in-game help: unit cost, sorting
- gameplay statistics feedback
Edit: Continually adding new suggested changes.
