Here's a quick overview:
* Character creation (custom classes are currently disabled but will be in later).
* Proper world serialization on save: the state of the world around the player is saved, including things like monster states, loot collected, dead bodies, switch states, animation states and so forth.
* Resting
* Proper skill advancement
* Many skills implemented (though still a lot more to go).
* Most of the dungeons in Daggerfall are now explorable, though not all features are functional yet (such as teleporters and dungeon water).
To get the latest build, version 0.197, take a look at the http://daggerxl.wordpress.com/.
As usual comments are welcome.