"The sidebar has a completely new look and feel. It samples the color of your wallpaper and fades in the sampled color so that it fits seamlessly onto your desktop. Some of our gadgets have been redesigned so that they are easy to tell apart, easy to read, and easy on the eyes. More differentiated gadgets allow for faster scanning of information through the sidebar. And we've created a new dialog for adding gadgets so it's easier and faster than ever to find the right gadgets for you."
Search results get a small preview box below the snippet, so you can make an idea if they're useful. Of course, the preview box is small enough to be hardly usable, and there's no highlighting for your query. The box reminds me Ask.com's binoculars.
Google Desktop has a new feature that shows warnings if you're trying to visit sites that "might be trying to steal your personal information or install malicious software on your computer". They're the same malware warnings from the search results combined with the anti-phishing technology previously included in Google Safe Browsing and as an advanced option in Firefox 2. Google Desktop automatically updates a list of suspicious or malicious sites by downloading information from Google's servers.
While there's no dramatic change in functionality, it's strange to see how a different theme makes you look at a software from a different angle. Google Desktop became more distant, more serious and looks more and more like Vista's sidebar.