According to the PlayStation Blog, when the update goes live on October 18, subscribers to the movie rental service will be able to stream movies in 1080p. The update also makes the PS3 the "first consumer electronics device to support 5.1-channel surround sound on movies streamed from Netflix." Netflix also announced that it plans to eventually provide streaming surround-sound support to other platforms in the future.
The new interface seems better too. Hopefully it'll be more responsive; the original one is pretty slow.