From duffberts developer tips newsletter article:

Most of us look forward to the latest release of Notes and Domino. We park on the download pages, constantly refreshing the browser in hopes to be one of the first ones to get the latest and greatest. Version 8.5.1 becomes 8.5.2, which then becomes 8.5.3, which then bec . . . hold on . . .

What's this 8.5.3 Upgrade Pack 1?

Welcome to the new world of Notes and Domino upgrades. IBM has moved to an upgrade pack model, where you can install new features without having to upgrade the entire client. Version 8.5.3 Upgrade Pack 1 is the first release to follow this new approach, so what do we get in this "not-a-release"?

The main emphasis is on XPages. The Domino XPages Extension library, previously only available on OpenNTF, has now been pulled into the official supported Notes client. In my opinion, this is a big deal. It's been great that IBM has officially backed the OpenNTF version and contributed/fixed/enhanced many of the features there. But too many organizations don't want to install software that is not "officially" from the vendor. This update pack fixes that issue, as well as adding new functionality on top of it.

IBM has also added a new REST API called Domino Data Services, to allow you to get your data served up more easily via JSON. Given the ease of manipulating JSON via JavaScript or Java, you should be able to get much more creative (or generate less code) to create new application features more quickly.

Finally, the Teamroom and Discussion application templates, two workhorses of the Notes/Domino world, have been updated with XPages-based features to support mobile usage. Given the significant move to mobile-based platforms such as smartphones and tablets, this opens up a whole new target audience for these applications, and it should be even easier to roll these out in more situations with fewer compromises in terms of functionality.

Pete Janzen has a good write-up of the new Update Pack on developerWorks.
You can also check out the official update pack information.

If you're focusing on XPages and/or mobile development, this is one upgrade that you won't want to miss out on.