Some info and images from Redigit were posted on the Terraria forums, listing a huge number of notable changes (and some entries listed just for laughs as well as thoughts on further changes). In addition to gameplay tweaks to make inventory management easier (double-sized chests, larger inventory), customization easier (HSV sliders for colors like seen above, dyes and more), and a ton of new monsters and equips, Redigit says he's still working on new content for 1.2 (item tiers and rare drops), and the idea of some things being generated in one world but not another has been pushed. Redigit says he'll also be taking a long vacation after 1.2, "anything from a month to a year". Source (with the full list). Wow, that's a lot of changes and new stuff. This is above what 1.1 brought, indeed.