Shared items have grown up and gotten their own section in the navigation pane. You can collapse this entire section and use the title to see everything your friends have shared, or leave it open to track friends with shared items. (Don’t forget that you can add new friends in “Sharing settings“.)

More bundled feeds!

Previously Google has some default bundles that you could subscribe too, in a variety of areas. Previously this was very limited and there were only about 10 areas. Now they have added huge amounts of bundle feeds for pretty much every major niche. If you go to “Browse for stuff” then you can see bundles.

Collapsible Navigation

Each section of the navigation pane now has its own options menu and minimize/maximize controls. You can collapse each major section of navigation down to one line and focus on only the things you choose to use.

Updated look and feel

The look and feel has changed a lot in this new version of Google Reader. I personally would have liked it if there was an option to return to the old version or at least have a variety of versions. The new version is very neutral, with white and a very light blue being the main colours. However, I find post a lot harder to read in this new version. Recently Gmail received a variety of themes in which users could choose from, I really hope this isn’t too long in coming to Google Reader.
Overall

Overall the changes to Google Reader were needed, except in the case of changing the colour scheme. I think the colour scheme changes are definitely a step backwards, but this can be changed when hopefully they release a themes range to choose from.