The update, as noted before, is focused on making your smartwatch a bit more independent. Once you get the update, you'll be able to start music playback from the watch through your handset, or be able to transfer tunes through Google Play Music to your smartwatch for offline playback. You'll even be able to pair a Bluetooth audio device directly to your watch to listen to music without your smartphone around. It also adds support for GPS location tracking, but that won't help anyone until the Sony Smartwatch 3 is out, because that will be the first Android Wear device with GPS built-in.
Google has also reorganized the Play Store a bit to make it easier to find the Android Wear apps that you want... sort of. The problem is that (as far as we can see) Google hasn't made a landing page to point you to these new Android Wear sections, you need to have the links directly to them. There appear to be 8 new sections for Android Wear apps: Featured, Health & Fitness, Travel + Local, Social, Tools, Communication, Productivity, and More Apps.