Well, one of the main things is being able to span a backup over multiple CDs or DVDs. In Backup 1.0, you could only back up 650MB to a CD or something like that -- and that was that, no way to backup more onto another CD.
Now, Backup 1.2 has the ability to backup as much as you want to to CDs, since when it fills the first CD, it'll spit it back out and ask you to put in another one to continue backing up.
There should be some other features, but this one is the one that struck me as the most important or useful.