User preference to disable Flash uploader
Some users have run into problems where Flash is enabled but Flash-based uploads would fail. Individual users can now turn off the Flash uploader even if the admin has enabled it.
Robot identification in online visitors
The online visitors lists now distinguishes guests from robots based on user agent and counts them separately.
When viewing the list of online users, robots will be displayed differently, showing you a bit of information about the robot. The online users list can now be filtered to just members, guests, or robots.
For larger forums, particularly ones concerned with time outs from modifications to large tables, 1.2 adds a simple command-line-based upgrade system (library/XenForo/Install/run-upgrade.php).
Note that this doesn't handle replacing files. It simply substitutes running the <url>/install/ portion.
Attachment thumbnail rebuild
Attachment thumbnails can now be rebuild via Tools > Rebuild Caches. This is generally only needed if you change the attachment thumb size.
Per forum option to require a prefix
Individual forums can now require a prefix to be selected before a thread can be created. Note that this (intentionally) only applies to threads being created there. Moderators moving threads or taking similar actions are exempt.
Page nodes are searchable
If you have page nodes with content in them, they will now be indexed and displayed in search results. (Note that if you are upgrading, you will need to rebuild the page search index for them to become searchable.)
Sub-forum popup menu can be disabled
You can now use a style property to disable the sub-forum popup menu and simply display the forums in a small list below the forum.
Quote height limited
There is now default CSS to prevent quotes from dominating messages by setting a max-height. Embedded media and images with the quotes will be further shrunk as well. Quoted images can still be clicked to be viewed full size.
Support for tabs on new content pages
For add-on developers, there is now a new system to add tabs to the top of new content pages (such as "new threads"). This will make it easier for users to find updates to non-thread/post content.