To answer your question, the 134 does ALOT that the 132 does not. Both decode Prologic, DD, and DTS, both switch composite to S video, but the big differences are:
The 134 switches to component from any feed, it decodes 7.1, side channels, it has the means to be upgraded whereas the 132 does not (although they both have 6 channel analog ins for any decoder of DVDA/SACD) and thge like. The 132 COMES with a built in tuner (the 7084) but the 134 DOES NOT! It is an extra $500 module.
If you care a great deal about 7.1, the 134 is the way to go. If you are perfectly content with 5.1, the 132s are being sold very cheap, all things considered. The switching deal has NO value to me as I run all of my sources through a scaler or would go direct to the monitor anyway. McIntosh feels this is a big deal, but unless you are running 10 sources, no value to me.
One thing I can not stand about the 132 is the lack of any bass management. No crossover selections at all. One option I like is to run subs (at times) with stereo. This is NOT an option with the 132, unless running speakers in small, automatically crossed at 80. I do not know if they made any, in my mind, improvements in this regard to the 134.
The 132s can be had for about $3,500 and the 134 and $5,500.
My bet is McIntosh will come out with an external 7.1 module that will work perfectly with the 132s soon. The above pricing allows $2,000 for this unit, and it would probably sell for much less. Go with the 132.