The Mesa 7.8.0 release is carrying the new i965 Gallium3D driver, a new EGL state tracker, blit support for the classic ATI R600/700 driver, new Gallium3D documentation, OpenGL ES 1.1/2.0 improvements for Gallium3D, support for new OpenGL extensions, and various improvements to the different DRI drivers committed since the release of Mesa 7.7.0 in late December.
Mesa 7.7.1 provides bug-fixes collected over the past three months that go atop the 7.7.0 code-base. Mesa 7.7.1 is being used by Ubuntu 10.04 LTS and other Linux distributions releasing soon that do not have the time to stabilize against the new and exciting Mesa 7.8.0 release. In traditional manner, Mesa 7.8.1 with its bug-fixes will arrive at around the same time Mesa 7.9.0 is released in the coming months (unless of course OpenGL 3.x support is working by then, in which case the release would be known as Mesa 8.0).
The very brief Mesa 7.7.1/7.8.0 joint announcement can be read on the Mesa3D mailing list.
Relating to Mesa 7.8, you may be interested in our benchmarks of recent Mesa releases (including Mesa 7.6, 7.7, 7.8-rc1, and 7.9-devel) and the ATI Radeon Gallium3D vs. classic Mesa driver performance. We also have Radeon KMS vs. UMS performance with Ubuntu 10.04.