Yes, I know an update was just released today, but I didn't want to be responsible for any more delay. I will probably be editing this list as I think of more items.

NOT ordered by importance
1. 60 hz refresh for ntsc users. mplayer can play 400x224 at 60 fps, but it doesn't play smoothly on the 50 hz lcd.
2. SDHC. I know I'm not alone here.
3. Usb Host. May already be included in today's update, but I couldn't make it work.
There's interesting stuff in /sys/devices/platform/musb_hdrc/mode and /proc/driver/musb_hdrc but I couldn't change either to say "host." Maybe I need a mini-A cable.
4. Playback of google videos in the media player. Google provides an option for linux users to download an avi, but the media can't play these files. They don't show up in the list. Canola can play the select few that have sizes that are multiples of 16. Mplayer does a good job on all of these videos.
5. Smaller, transparent desktop widgets. Why do I have a background if I never see it?
Edit:
6. OpenGL support. OMAP2420 has a 3D accelerator...
7. Full IVA support. I believe it can do VGA 30 fps encode and decode. Maybe something else does encode, but whatever it is I want the option of putting it to work.
8. Flash player 9.