Does anyone know what exactly this update changes? There are some glitches that I am still interested in exploiting, so mainly I am wondering if it patches up those kinds of bugs.

Just google the patch notes, there are several websites with them.

Fixed issue where projectiles did not properly fade away
Fixed occasional issue where a guest would arrive to the player’s wedding dead
Dragon corpses now clean up properly
Fixed rare issue where dragons would not attack
Fixed rare NPC sleeping animation bug
Fixed rare issue with dead corpses being cleared up prematurely
Skeleton Key will now work properly if player has no lockpicks in their inventory
Fixed rare issue with renaming enchanted weapons and armor
Fixed rare issue with dragons not properly giving souls after death

Might I suggest looking at the tech support forum first before applying the update?
It appears that this patch may cause more problems then it fixes.

Notes they didnt add:

Disabled all resists so everything kills you in two hits.
Made dragons fly backwards because they're just that awesome.
Broke your game because we don't want you playing it, svckers.

I heard 1.2 makes magic/element resist not work.

Why would you not mention the texture fix, that was the biggest change in this patch many people have been waiting for.

Installed the update. Nothing has been wrong. So far...

Don't worry problems will start flooding in before you know it

And weaknesses.. So your not only susceptible to any magic, but also your magic and enchanted weapons do crap damage.

Looks like I'll be holding off on downloading it

yeah ive had dragons flying backwards and it lags the game like crazy and when you get their health low instead of landing they fly higher and do some sort of mixture between breakdancing in the sky and chuck norris kung fu