The PlayStation Vita firmware 1.66 update is now available in Europe, replacing v1.65 after the update was pulled yesterday due to a "technical fault." Sony assured customers who had already downloaded the update that they would be fine, but the problem was caught before it reached North America.
Now that v1.66 is available for European Vita systems, it should be on its way to the US soon. The US PlayStation Blog had clarified that the update disrupted ad hoc play for PSP titles -- not a system-breaking bug by any stretch, but it could have been annoying for some players.
As for what the update is supposed to do, it will add a "Notification Alert" option to toggle alerts, "After 10 minutes" will be an option under the Power Save settings, an icon will alert you to new activities in the LiveArea, and the keyboard will support Caps Lock.