The Xen 4.1 release contains a number of important new features and updates including:

A re-architected XL toolstack that is functionally nearly equivalent to XM/XEND
Prototype credit2 scheduler designed for latency-sensitive workloads and very large systems
CPU Pools for advanced partitioning
Support for large systems (>255 processors and 1GB/2MB super page support)
Support for x86 Advanced Vector eXtension (AVX)
New Memory Access API enabling integration of 3rd party security solutions into Xen virtualized environments
Even better stability through our new automated regression tests
Xen 4.1 Release Notes
Xen 4.1 Datasheet

Xen 4.1.3 is a maintenance release in the 4.1 series and contains:

Fixes for the following critical vulnerabilities: We recommend all users of the 4.0 and 4.1 stable series to update to these latest point releases.

CVE-2012-0217 / XSA-7: PV guest privilege escalation vulnerability
CVE-2012-0218 / XSA-8: guest denial of service on syscall/sysenter exception generation
CVE-2012-2934 / XSA-9: PV guest host Denial of Service
CVE-2012-3432 / XSA-10: HVM guest user mode MMIO emulation DoS vulnerability
CVE-2012-3433 / XSA-11: HVM guest destroy p2m teardown host DoS vulnerabilit

Among many bug fixes and improvements (over 100 since Xen 4.1.2). Highlights are:

Updates for the latest Intel/AMD CPU revisions
Bug fixes and improvements to the libxl tool stack
Bug fixes for IOMMU handling (device passthrough to HVM guests)
Bug fixes for host kexec/kdump

It also contains the following fixes from earlier maintenance releases:

Security fixes including CVE-2011-1583 and CVE-2011-1898
Enhancements to guest introspection (VM single stepping support for very fine-grained access control)
Many stability improvements, such as:

PV-on-HVM stability fixes (fixing some IRQ issues)
XSAVE cpu feature support for PV guests (allows safe use of latest multimedia instructions)
RAS fixes for high availability
fixes for offlining bad pages
changes to libxc, mainly of benefit to libvirt
New XL toolstack
Debug support: kexec/kdump
Remus (High Availability)
Device passthrough to HVM guests
Interrupt handling
Support for Supervisor Mode Execution Protection (SMEP)

Compatibility fixes for newer Linux guests, newer compilers, some old guest savefiles, newer Python, grub2, some hardware/BIOS bugs.