The update fixes numerous multiplayer issues, including those requested by the community, adds support for Hyper-Threading Technology, and several other additions such as voice chat in multiplayer and a one-minute warning in tournament matches. For a full list of updates you can check out the ReadMe file included with the update.
As a Beta the update is not mandatory, but those that do update will only be able to play multiplayer matches against other 1.1 users, and all previous game saves will not be compatible. Once the Beta has been proven to be completely solid (report bugs here) the update will become final, and as such will be a required update via the update option within the game. The Final 1.1 update will also include four new multiplayer maps, with more new maps and game modes scheduled in the coming months.