Minimal. As I understand it, hdmi 1.3 has most improvement in the audio.
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Yes. The main benefits of HDMI 1.3 are audio--it can transport a digital stream for SACD or DVD-A for D/A conversion at the receiver, and it can transmit Dolby Digital Plus, Dolby True HD, and DTS HD for decoding at the receiver as well.
The 1.3 spec also has something about "deep color", which can transmit a bigger palette of colors, but I'm not sure if: 1) any disks have been encoded this way, or 2) a current TV with HDMI 1.3 has the additional color resolution.
Johnnyb53 - Yes there are a few new display units that can take advantage of the larger color palette. Sony is one manufacturer offering that capability in at least a couple of their sets. I haven't demo'd any of them yet so don't know if there's a noticeable difference in color accuracy. Also, I did read that some (BluRay) discs are starting to be produced with Dolby TrueHD.