Here are the details:
The 10.7.3 update is recommended for all OS X Lion users and includes general operating system fixes that improve the stability, compatibility, and security of your Mac including fixes that:
- Add Catalan, Croatian, Greek, Hebrew, Romanian, Slovak, Thai, and Ukrainian language support - Address issues when using smart cards to log into OS X - Resolve issues authenticating with directory services - Address compatibility issues with Windows file sharing
The client update -- the version that comes from Software Update -- can only update Mac OS 10.7.2, while the client combo (my preference) can upgrade 10.7.0, 10.7.1 and 10.7.2.
From the full release notes.
The OS X Lion v10.7.3 Update includes Safari 5.1.3 and fixes that:
- Add Catalan, Croatian, Greek, Hebrew, Romanian, Slovak, Thai, and Ukrainian language support
- Address issues when using smart cards to log into OS X
- Address compatibility issues with Microsoft Windows file sharing
- Address an issue printing Microsoft Word documents that use markup
- Address a graphics performance issue after sleep on some earlier iMacs that use ATI graphics
- Resolve a Wi-Fi connection issue when waking from sleep
- Address an issue that may prevent Safari from opening before joining a wireless network
- Fix a potential issue authenticating to an SMB DFS share
- Include RAW image compatibility for additional digital cameras
- Improve binding to read-only Active Directory Domain Controllers
- Improve binding and login speed for Active Directory users in a domain whose name ends in ".local"
- Improve reliability of Dynamic DNS (DDNS) updates by Active Directory clients
- Allow login with an Active Directory username that contains a space
- Improve compatibility with Active Directory schemas that have been extended with the "apple-user-homeDirectory" and "apple-user-homeurl" attributes
- Fix home directory Dock item for Active Directory users with mobile accounts
- Allow NIS users with MD5-hashed passwords to log in
Update: A few observations:
- It's a big update: the delta update is a little over 1.0 GB – the combo update is 1.2 GB.
- It takes a while to run the update – a fully patched Core i7 MacBook Pro 15-inch took 45 minutes.
- The biggest compatibility issue appears to be Symantec's PGP Whole Disk Encryption. Beta versions of Mac OS 10.7.3 were incompatible with PGP WDE and there's no reason to believe that the release version will be any different. More information.
- Compatibility with other supported applications (Apple applications, Adium, Adobe Reader, dataComet-Secure, Fetch, FileMaker Pro, Firefox, Flash Player, Microsoft Office, SEP, etc.) seems generally good.
- There are a profusion of fixes for directory services.