XFree86 4.0 is largely a rewrite of the base system to make it structurally nicer (one executable instead of various server litter), Support for Xinerama (multiple monitors bound to one display), 3D in the server for a whole bunch of cards, DRI support (did they have any before?), SOME 2D alpha transparency.

I think what they meant by this not being a stable release is that as an X Server it works but XFree changed the previous scope of an X Server somewhat (internal card detection/setup... command line: "XFree86 -configure", etc..) and these features aren't fully debugged. Previous cards aren't fully supported yet.. someone's having problems with the ASUS SP-97v on slashdot whereas the GeForce range seem to be toasty fast (finally in 3d!). Stable? I don't know what that means. It works for me.

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