There’s no announcement yet on the jQuery blog, but there are jQuery version 1.2 files available for download on the jQuery home page.
A dozen or so functions present in earlier versions have been removed in version 1.2 (some XPATH selectors, some DOM manipulation and traversal functions, and some AJAX functions). Full details are here.
During the transition, two backward compatibility plugins are provided that restore the missing functions.
What’s new? An official Color Animation plugin that supports animating CSS colors of elements by using the new jQuery Animation API. Supported CSS properties include: ‘backgroundColor’, ‘borderBottomColor’, ‘borderLeftColor’, ‘borderRightColor’, ‘borderTopColor’, ‘color’, ‘outlineColor’.