I tried the latest snapshot and the new AI has got to be my favourite feature. Passive mobs don't constantly jump around like idiots when they're fenced in, although as soon as you open a gate to get to them they'll try to escape almost instantly. The hostile mobs will actually go around fences and walls to get to you, making fighting them a bit more fun. My only complaint is the lengthy amount of time you must wait to get a cat, and the cats make noises too frequently.
I'm not sure exactly how when 1.2 will be released, but I'm guessing it'll be as soon as they fix the bug that's causing the world to generate without any caves.