As rumored, Microsoft started shedding light on DirectX 11 at the Gamefest 2008 event in Redmond, Washington yesterday. Shacknews has the skinny on the graphics portion of the next-gen application programming interface toolkit, which will bring new functionality while retaining compatibility with Windows Vista.
Quoting Microsoft, the Shack says DirectX 11 will introduce compute shaders, a technology that will "[lay] the groundwork for the GPU to be used for more than just 3D graphics." Other DX11 features will include tessellation, which will make 3D models smoother up close (like the old ATI TruForm tech), and multi-threaded resource handling, which will help game developers tap multiple CPU cores.
Interestingly, Shacknews mentions that DirectX 11 will add functionality to existing, DirectX 10/10.1-class graphics processors. Microsoft apparently didn't reveal which features will require new hardware, however.