Notable additions for survival:

Book copying mechanics has been altered to differentiate the original & copies of books
Activator rails can eject entities from Minecarts
Notable additions for mapmakers:

Added a spectator gamemode (/gamemode spectator). Not 100% finished.
Spectators cannot be seen by anybody but other spectators
Spectators can view inventories/etc, but not modify them
Spectators can go through any entity or block without interfering with it
Spectators can click on entities to take their camera
Spectators cannot use items, place blocks, destroy blocks or interact with blocks in any way
Spectators are only slightly buggy maybe sometimes

Bugs fixed in this snapshot:

[Bug MC-38944] – Joining Realms World "Cancel" Button Mis-Placed
[Bug MC-44521] – @a, @e, and any UUID references work incorrectly after a player dies.
[Bug MC-45050] – /fill … skull | Hitbox Bug
[Bug MC-45159] – Blocks with tile entities don't get removed when you clone / fill an airblock to their position.
[Bug MC-45453] – Items & Blocks placed in item frames are rendered incorrectly
[Bug MC-45470] – Items don't render on the ground properly
[Bug MC-45478] – Pre-snapshot14w04a villagers break crops but don't replant them
[Bug MC-45492] – Transparent blocks are much darker
[Bug MC-45554] – Two tall flowers variants are not generating.
[Bug MC-45763] – Some blocks are facing the wrong way if placed in an Item Frame
[Bug MC-45764] – Map will not show in item frame
[Bug MC-45795] – Villagers can not place or pick up any crops
[Bug MC-45847] – /summon Villager Farmer NBT tag canPickUpLoot will default to 0

To get snapshots, open your launcher and press the “New Profile” button. Call it “snapshots” and check the box saying “Enable experimental development snapshots” and save. To switch to the normal version, you can select it in the dropdown at the bottom left corner of the launcher. Back up your world first or run the game on in a different folder (See the “new profile” dialog). Snapshots can corrupt your world, please backup and/or run them in a different folder from your main worlds.

Cross-Platform server jar: https://s3.amazonaws.com/Minecraft.Download/versions/14w05a/minecraft_server.14w05a.jar

Johan replied to a Reddit comment saying that he "hopes" to add Villagers and confirms that they will release the 0.9 update or at least the Betas in April.

Johan replied on a Reddit comment giving the idea of the brand new controls for larger devices

Johan Bernhardsson replied to a Reddit comment confirming Saddles and riding on pigs

@Lighticegamer Not sure, but I think boats will be in 0.9
— Jens Bergensten (@jeb_) December 27, 2013

Boats have been confirmed for 0.9, as stated by Jens Bergensten himself

We all know that most Minecraft news comes from the developer’s Twitter accounts, but what about other sites? Believe it or not, Johan from Mojang has a Reddit account that he uses to respond to users on Pocket Edition-related subreddits. While browsing his comment history, I found something interesting that I have not seen elsewhere. On Reddit, he replied to a user asking if 0.9.0 would be out by the end of 2013, he said “Nope, planned for Q1 next year.”

In other words, Johan said that Minecraft Pocket Edition 0.9.0 will be released in the first quarter of next year. Technically speaking, the first tax quarter of 2014 (which is what Q1 means) starts on January 1st and ends on March 31st.

Source: Reddit

Yey, MCPE 0.8.1 has been submitted. Besides multiplayer/realms fixes, it should also fix keyboard issues on Android. :)
— Johan Bernhardsson (@jbernhardsson) December 18, 2013

• Added Chicken Jockeys
  • Consist of a Baby Zombie riding and controlling a Chicken
    • Because the Zombie is riding a Chicken, it cannot take fall damage
    • As it is a Baby Zombie it will not burn up if exposed to daylight
  • Extremely rare - every Baby Zombie spawned has a very small chance of spawning as a Chicken Jockey
• Sheep with the custom name "jeb_" change their color, fading between all 16 wool colors ^[2]
  • Commonly reffered to as "Rainbow Sheep", "Disco Sheep", or "Jeb Sheep"
  • Color changes are visually only; does not affect wool drops
• One click broadcasting to Twitch.tv ^[3]
  • Microphone can be recorded too.
  • Chat integration in the game. ^[4]
  • Several new settings^[5]
    • Twitch Broadcast Settings
      • Quality, Framerate, Bandwidth, Send Metadata, Mic Volume, System Volume and Compression
    • Twitch Chat Settings
      • Enable and User Filter
• New Mojang splash screen - logo is now red instead of red-orange, has 2 square corners, and the rounded corners are rounder. The text is black instead of orange, the font weight is lighter (bold instead of black), and the face appears to be a custom hybrid of Insignia and Code Pro.
• The Sharpness enchantment now affects the "attack damage" attribute.
• Minecraft Realms servers now have an icon which is the face of the owner's skin

Fixed 38 Bugs: [hide]

MC-107 – Potion of night vision: total blackout MC-190 – Misaligned textures on south and east faces for non-full blocks MC-2488 – The Unicode font is illegible in fullscreen mode MC-5002 – Some texts can't be translated in a language file MC-11129 – Unicode font text shadow in fullscreen mode MC-12413 – Furnace GUI - "full" arrow texture always drawn on leftmost column MC-12964 – Server performance issue: Chunk coordinates use a bad hash function MC-14323 – Minimising other windows open, resizes Minecraft window MC-16259 – Enchantments not showing stats in tooltip. MC-23132 – Click or right-click stuck on OS X MC-26102 – OS X Fullscreen is not supported MC-29469 – Unable to take screenshot in GUI or active chat line MC-30300 – Minecraft Mac Command Key Glitch MC-30527 – Achievement "Adventuring Time" does not work MC-30537 – Flower duplication glitch MC-31006 – Adventuring Time — list of visited biomes resets on login MC-31388 – Right clicking a flower pot that has certain plants in it while holding another plant replaces the one in the flower pot with the one you're holding MC-31622 – Wrong render distance beyond 8 and more chunks settings. MC-32295 – Glitchy item borders with Mipmapping and Anisotropic Filtering activated MC-33035 – Loading text in Polish (and other languages with Unicode font) isn't showing properly MC-34573 – Font file of Unicode Page C2 (Korean) shows character '숼'(U+C23C) at the position of '쉴'(U+C274) MC-35617 – Cactus has incorrect inventory image MC-35643 – Items with enchantment effect cause blocks and potion effects indicator to not render MC-35658 – Water too transparent? MC-35797 – Background Rendering Issues When Picking Up Enchanted Items / Caption of containers white MC-35856 – Multiple Background Songs Playing At One Time / Automatic music overlap MC-35897 – Damaged armor, tools & weapons placed in certain inventory slots cause other slots to go black MC-36159 – Graphical glitch on beacon effects in inventory screen. MC-36329 – Rendering glitch when looking at river through stained glass MC-36383 – Translucent parts of stained glass not visible in 3rd person mode MC-36395 – Weird rendering of transparent blocks on the 0-axis[6] MC-36482 – Upon exiting (shift click) minecart, the range and criteria is drastically off, up to 8 blocks away MC-36705 – Block held in 3rd person rendered incorrectly MC-36772 – Enchanted items have big enchant around whole item MC-37106 – All the textures are flipped/mirrored on north/east sides of blocks MC-40255 – Falling Invisible slime causes "blue screen" MC-41135 – Players become invisible+immune for PvP damage, after being killed and relogging instead of respawning MC-41165 – SetSlot packet can no longer set item under cursor MC-41508 – Hopper: java.lang.IllegalStateException: Not a JSON Object: "

Oh, and we also released the Beta build 8, if you want to find some horrible last bug that will send us into pre-release panic!
— Tommaso Checchi (@_tomcc) December 6, 2013

Alpha Build 8 addresses these features:

• Improved Signs and Chests synchronization lag in multiplayer
• Sand and Gravel now spawn resources when falling on torches, etc

• Fixed clients placing the wrong block type in multiplayer
• Fixed double chests becoming unpaired
• Added back hurt and fire color overlay for mobs
• Fixed minecarts not being able to go all the way from bedrock to sea level (stopping at level 32)
• The chest inventory now refreshes when two players change the content at the same time

XCode didn’t really want to cooperate, but we have submitted 0.8 to Apple! Android final will be out together with iOS :)
— Tommaso Checchi (@_tomcc) December 6, 2013

The 0.8 update has been submitted by Mojang to Apple. Mojang will submit the update to Google once it's released on Apple which will take 4 days to be reviewed by Apple (December 11-12)

Here are the things that Alpha Build 7 offers:

• Moved Grey Wool in the right inventory slot
• Ice is not transparent anymore in the toolbar
• Wooden tools can now burn
• Added UI message when boarding minecarts
• Removed useless D-pad arrows when in minecarts
• Powered Rails are powered in hand and in the inventory
• AI performance improvements

• Fixed text input on Android
• Fixed spruce and birch leaves being swapped
• Fixed furnace side texture
• Fixed sandstone slab side texture
• Fixed red hurt overlay skeletons and chickens
• Fixed an artifact over the flame in the Furnace Screen
• Tnt doesn’t send you into orbit anymore
• Fixed Armor slots having no health bar
• Fixed autojumping while in minecarts
• Fixed falling into the ground exiting a minecart that’s on rails

• No UI information about how to get out of minecarts
• Not removing disconnected player correctly (known since 0.7)
• Hearts now don't show if joining while animal is already in love
• Minecarts end up in walls in a very specific rail configuration
• There is no item pick up animation
• TNT doesn't destroy some kinds of blocks, in some worlds
  
  There are still some bugs, which will be fixed in the final version of 0.8, before it can be submitted to Apple, Google, Amazon, etc.

• Blocks:
  • Birch and Spruce Wood Planks, Slabs, and Stairs
  • Block of Coal
  • Carpets
    • All 16 colors in creative mode
    • Only red carpets in survival mode
  • Cobblestone Walls
  • Hay Bales
  • Iron Bars
  • Jack O' Lantern
  • Rails
    • Powered Rails (always powered)
  • Creative-Only:
    • Jungle Wood, Leaves, Wood Planks, Slabs, and Stairs
    • Sponge
    • Dead Bush
    • Mossy Cobblestone Walls
    • Snow (cover)
    • Cobwebs^[2]
• Crops:
  • Beetroots
    • Although Beetroots will be a source of red dye, Red Mushrooms still will give red dye when smelted. ^[3]
  • Carrots
    • Rarely dropped from Zombies
  • Potatoes
    • Rarely dropped from Zombies
  • Pumpkins
• Items:
  • Beetroot Seeds
    • Have a 1/15 chance of popping out from grass when hoed
  • Clocks
  • Compasses
  • Minecarts
  • Pumpkin Seeds
  • Redstone (cannot be placed as Redstone Dust until 0.9.0)^[4]
  • Ink Sac (currently unobtainable in survival mode)
  • Cocoa Beans (crafted from Orange dye and Inc sac).

• Foods:
  • Beetroots
  • Beetroot Soup
  • Carrots
  • Potatoes
  • Pumpkin Pie
  • Baked Potatoes

• Blocks/Items:
  • Bone Meal
    • Nerfed like in the PC edition
    • Can grow Ferns and Tall Grass in survival and creative
    • Now grows Sugar Cane to maximum height (exclusive to MCPE)
    • Pumpkin and melon stems only grow by one when bone meal is used
  • Flowers now spawn other flowers when Bone Meal is used
  • Fire and lava now ignite TNT.
  • Redstone Ore now drops Redstone when mined^[4]
  • Sideways pointing wood blocks
  • New bow rendering & animated items
  • New fire effect
  • Remade painting rendering
  • Thrown eggs now spawn baby chickens.
  • Flowers
    • Position is now randomized
• Graphics:
  • 3D Clouds with new tessellation algorithm
  • Held items are now rendered in 3D, and bob up and down slightly
  • Lighter colored Water, Sky, and Grass
    • Water fades to non-transparent in the distance (iOS only)
  • Mipmaps (iOS only)
  • Refactored most of the rendering to use indexed VBOs
    • Remade arrow model
    • Inventory is now rendered using cached VBOs
    • New sky rendering using a triangle fan
  • Separated far and near chunks in two queues for performance reasons
    • Fog only on far chunks
    • Transparency only on near chunks
    • Alpha-test-only layers are hidden in far chunks
  • Lighting
    • Stencil Shadows
    • Dynamic PC-like lighting on entities
    • Ambient light tinting
    • Light direction depends on sunlight direction - affects shadows (exclusive to MCPE)
• Inventory/GUI:
  • Creative Inventory Additions:
    • Flint and Steel
    • Ice
    • Bedrock
    • Shears
    • Dyes
    • Tall Grass and Ferns
    • Cobwebs
  • New Creative Inventory, with four item categories
  • Transparent hotbar
  • Tapping the [...] will close the inventory while open.
  • Craftable recipes are shown first in the crafting screen
  • When selecting an item in the inventory it replaces the one in the selected slot
  • Changed the flow of Inventory for the Armor/Crafting screens so that the back button goes back to Inventory
• Mobs:
  • Breeding
  • Improved Mob AI System (Mobs will swim over deep water, and hostile mobs will be more intelligent)
  • Animals follow you when holding wheat (potato, carrot or beetroot for pigs)
• New defaults and changed options:
  • Added far (256) and farthest (400) rendering distances
  • Removed smooth lighting (now always on)
  • Fancy is now default on
  • Default rendering distance is now far
• Textures:
  • Brought all textures from PC
  • New texture atlas and texture generator script
  • Changing:
    • Gravel texture from  to 
    • Birch Leaves texture from  to 
    • Lapis Lazuli Block texture from  to 

Bug Fixes: [hide]

MCPE-347: Weird textures: Moiré pattern on bricks MCPE-61: Water flows downward next to farmland MCPE-2804: Fire doesn't ignite TNT MCPE-4736: Spiders have no abdomen MCPE-4887: Skeleton missing lower part of body MCPE-5359: Blocks in hand have no backface culling MCPE-1524: Graphical glitch when looking down above clouds MCPE-5411: Falling in creative on world load MCPE-2937: Chat crash MCPE-28: Xperia Play Creative Scrolling, PTAB7200 Or Other Tablets Gamepad Small Changelog is now final because Alpha Build 6 is now released, or will be changed if there are still some bugs

Here is a gameplay of 0.8 by JackFrostMiner