The addition of the Nether; a "Hell" world that can be used for quick travel, where you "portal in" walk ten meters and then "portal out" and you are 80 meters away - movement in the Nether in relation to the normal world is 1:8, meaning that for every block (meter) traveled in the Nether, 8 blocks are traveled in the normal world.
Dawn and Dusk now have reddish colors just like real sunsets and sunrises.
Torches were planned to become temporary light sources with the new permanent light source being lanterns, but the update didn't make it in time, and the idea has now been officially rejected (at least so far as adding lanterns).
The update was announced on October 4th, 2010, as seen at Notch's blog.
On October 8th, 2010 a new type of block was announced. And on October 11th Notch wrote the following on his twitter: "I just made the most unfair mob ever even more unfair. You will hate the Ghast."
On 10/10/10 Notch revealed the following screenshot on his blog:
On October 19th, 2010 Notch added the following on his blog: "There are six new block types (five of them have unique abilities), one new monster, a new dimension, and a couple of bug fixes."
On 22 October 2010 this article appeared on the PC Gamer website, giving more details about the new update. The article states that Ghasts are flying cuboid jellyfish that destroy blocks and shoot fireballs at you, and that portals to get to and from the Hell dimension will be made from Obsidian.
On October 25th, 2010 Notch tweeted: "Anyway! I'm working on the second new mob today, and it's far less dangerous than the Ghast. Right now they're kind of pointless, actually!"
On October 29th, 2010 Indie Games and PC Gamer published new articles about the Halloween Update, with reviews, videos and screenshots. Both sites have uploaded a second video, PC Gamer's is called Slipgate Adventures, and Indie Games' second video is here.