X.org version 7.3, after being delayed a few days, has now been released. This is the version that will be in the upcoming Ubuntu 7.10 release.
The so-called killer feature of this version of X is the new support for hotplugging of input devices (such as keyboard, mice, touchscreens) as well as output devices (monitors, projectors, and so forth).
The article at Ars Technica notes that old drivers will not work with the new X.org 7.3.
The input and video driver API/ABIs are not compatible with the previous server release, version 1.3, so you will not be able to mix and match drivers that were released for previous X server versions.
Have all the video drivers been updated? It would be a shame if this release brakes support for some video cards until their drivers get updated.