I LOVED the iPod shuffle update to 1.1. When I first got my shuffle there was a loud squeaking noise in between tracks and when they were paused, and even though I got used to 1.1 muffled it to a barely audible level. It also added for the shuffle to pause when the headphones got unplugged, which had happened a couple of times while running with it, and made me wish it had exactly that feature. And it did a better job at resuming from the same spot I turned it off at when I turned it back on later. I was really happy with that update because I didn't figure the shuffle could really have anything like that added to it just through software.
I haven't been able to install 1.2 yet but I hope it brings similarly good improvements.