The latest version of WordPress (v2.8 - "Baker") is now available for download and features many major improvements.

Users of 2.8 can browse the entire theme directory and install a theme with one click directly from the dashboard. Those bloggers who want to make edits or tweaks to themes or plugins will appreciate the new CodePress editor which gives syntax highlighting to the previously plain editor. Also there is now contextual documentation for the functions in the file you’re editing linked right below the editor.

WordPress also redesigned the widgets interface to allow for editing widgets on the fly, has multiple copies of the same widget, drag and drop widgets between widebars and save inactive widgets so settings are not lost. Developers also have access to a much improved API for creating those widgets.