- Fluid Simulation: Not very good for large scale sims but very good at small scale
- Particle Animations: Lots of cool particle effects from boids, to strands(hair/grass/...)
- Mesh modeling: This may be one of the weaker features as there are no n-gons(multi vertex faces) and things like boolean subtraction are very weak, but still a solid system.
- Sculpting: Along with multires it allows you to create some stunning images
- Sophisticated Rendering and Materials/Textures: A variety of procedural textures, and quite customizable materials, including Ray-traced reflection, ray-traced and other transparency, sub-surface scattering, Ambient Occlusion(Approximate and Ray-trace), ect.
- UV-Editing: A very comprehensive UV-Editing tool as well as texturing painting( even directly onto the mesh).
2.52 Download Page
And look at the development process by joining the firstname.lastname@example.org mailing list, or checking out graphicall.org which shows the latest builds/commits/ect. To get involved in development poke around the development tab on blender.org.
I started using Blender after hearing a couple comparisons between it and a much smaller(but still lovable) 3D Package called Anim8or. At first I thought the comparisons were unfair, but though they may have been slightly stacked the comparisons did show that blender was a far more advanced program. I mucked around in it, quite confused, for a while until I found The Essential Blender. A book(which you can download the text of and browse on the web), made by the Blender Foundation to introduce Blender 2.48(much different from 2.5). The text alone was invaluable, and when I bought the book much later it helped me to understand Blender a lot! I would definitely recommend this book to beginners.
Also just surfing the web for tutorials will help you come up with all sorts of stuff. A very good site that started a while back is Blender-Tuts which is a listing of many tutorials around the web. BlenderCookie is another website which has very comprehensive tutorials, although they are all video which can be a show stopper for low bandwidth users...
I hope this has helped you all to understand blender a little better. :D