The Linux 2.6.35 kernel introduces ATI power management support for those using the Radeon KMS driver, Intel H.264 VA-API support for newer Intel GMA chipsets, Radeon DRI2 sync and swap capabilities, Btrfs file-system improvements, and Receive Packet Steering (RPS) and Receive Flow Steering (RFS) support for transparently spreading of incoming network traffic load across available CPU cores. There's also a variety of other improvements across the other sub-systems as discussed on the KernelNewbies.org Wiki.
Our Linux kernel performance tracker that runs benchmarks of the very latest Linux kernel code on a daily basis had spotted a major performance regression within the Linux 2.6.35 kernel early on, but fortunately that issue was worked out. Overall the Linux 2.6.35 performance isn't much different from that of 2.6.34 or other recent releases, unless you're looking at the Btrfs performance or other areas directly touched by this kernel upgrade.
In the release announcement for the Linux 2.6.35 kernel, Linus notes his new policy of being more strict about merging new code into his Git tree after the -rc1 release worked out better this time around and resulted in significantly less commits than usual. With the Linux 2.6.36 kernel, Linus will continue to be stiff about not accepting new pull requests after the first release candidate. Linus is also rather concerned about the state of the linux-next tree for Linux 2.6.36, but at the same time he is very excited about a set of VFS scalability patches that will be merged into this next kernel. "On a slightly happier note: one thing I do hope we can merge in the upcoming merge window is Nick Piggin's cool VFS scalability series. I've been using it on my own machine, and gone through all the commits (not that I shouldn't go through some of them some more), and am personally really excited about it. It's seldom we see major performance improvements in core code that are quite that noticeable, and Nick's whole RCU pathname lookup in particular just tickles me pink."
The Linux 2.6.35 kernel is what's being picked up by Ubuntu 10.10 and other Linux distributions providing major updates within the next couple of months. We'll have out more Linux 2.6.35 benchmarks shortly.