Personally, I haven't had any problems. It added a vertical scrollbar to the right side of the iPod interface, but this is neither a seller nor a problem for me. Aside from that, it doesn't seem to have done too much that I notice. I really liked the 1.2.2 update, which substantially increased the sync transfer speed. This one doesn't seem to have done as much.
Also, I don't have any info on the iTunes versioning issue that plagued the earlier update. I haven't heard about, though, and the last time, there was almost instantaneous squawking (and, I believe, Apple warned people not to upgrade without the correct version of iTunes)
For a full rundown on issues other have had, see this thread:
http://discussions.apple.com/thread.jspa?threadID=1441001&tstart=0
Message was edited by: gwhizkids