Update 1.0.5 is an interim update that aims to add new features without making any drastic change to the game engine. The first addition you may notice is that Val, the Kerbal who floats in space on the starts screen, now has a face plate on her helmet. Now she won't die a horrible death. Lovely.
The Wheesley Jet Engine has had a visual upgrade, as has the Mark 1 cockpit and the Radial Intake. The game's thermal systems have also been tinkered with, adding a core temperature to the skin temperature of your creations, hopefully reducing the frequency at which they seem to spontaneously combust.
There's a new engine for your rockets, called the KS25. This engine has advanced vectoring capabilities, allowing you to compensate if your creation is unbalanced. There are also more new jet engines for your aircraft, as well as a crew body section to lengthen your aircraft and let you have a peek out a side window during flight.
For players who like to explore outside of their vehicles, the game now has a navigation ball for Extra-Vehicular Activity. Contracts have also been tweaked and they are now contextual, giving you goals that fit your style of play.
One of the biggest new features is the ability to perform an emergency landing in water, as well as the option of building vehicles that are made for landing and taking off from the sea.
While there is no date for the update yet, expect it to land (probably on water) within the week some time.