....let's look at some things I consider advances. In previous years the gas engine could not shut off at at a stop if the air conditioning was on. A new electric motor driven portion has been added to the AC compressor so at a stop the elctric compressor keeps the cabin cool. This is major to me. It means while the car is moving I can keep the AC off and use it to cool down at stops without using the ICE.
On traction and stability the car has improved leaps and bounds. Its wider wheelbase and slight decrease in length makes it much more a driver's car. It was tested recently by a test race car driver, who posted at hybridcars.com in the HCH section on the results. It blew the Prius out of the water on this, and is an improvement over the 2005.
The battery pack is both smaller and lighter, and generates more HP when used maximally. The gains here are obvious I would think. Performance goes way up, at no Fuel Efficiency cost. The 2005 and prior FE would have tanked if it had to perform like the new 2006.
I do not know if the older model HCH had head curtain air bags(EDIT: nope, side curtain only). If not, this would be a major advance, as a lot of driver head injury is due to left front head banging on the pillar glass/roof area.
The cabin is 4 decibels quieter. While not a Lexus, the difference is noticeable, depending on raod surface actually. The insulation is awesome from door up, but road noise insultation was not attended to in the same way is what I mean.
The car has more power. Its not my now retired Volvo, which the new owner took up to 100 yesterday he says, but it's in the game finally.