The new questing system has been added to help new players and give old players something to do as well. For now there are about 20 quests, the last 2 are repeatable and have to do with leveling and hunting down NPCs. Just type /quests to see which ones are currently active for you.
The new Questing skill gives an experience bonus for completing quests. So you can get more each time. I also changed the smelting skill bonus, made NPCs who chase in the overworld more forgiving, and fixed a bug that sometimes caused things to die more than once. This update is the result of my todo list poll – go vote on the forums if you would like to see certain features implemented sooner!