Roy Rubin over at Magento discussed what we can expect in the upcoming Magento 1.1.  On top of that list are performance improvements with as much as a 40% improvement in the catalog and sales modules.  Enhancements and new to Magento 1.1 will also include:

• Admin UI improvements: Changes will be made to only load data when necessary, improving the responsiveness of the Admin Panel.
• Web Services API: A highly requested feature which will make integrating Magento with 3rd party software much easier. The API will be added for the catalog, customers and sales modules.
• Virtual Products: These products which do not require shipping information and/or inventory management add to Magento’s product types.
• Customer Defined Product Options: This functionality will allow customers to define text, images, etc. for products.
• Bundled Products
• Improved support for EU and Canadian taxes: The tax rules and functionalities for EU and Canadian taxes will be added to the Core

For additional information along with a video, check out Roy Rubin's post.