Firstly, oh boy is it goddamn pretty. They've slapped on a ton of lighting effects and bazillions of textures on everything. The characters don't look like wooden puppets any more. Cars when they explode send firey fragments all over the place and leave little burning piles of debris everywhere.
Haven't really played that far in to it yet. I've already maxed out my wanted rating though...by going and investigating the bridge to the next island. Not sure what the deal is there, but I suspect I've just not been paying attention enough to the radio cos I've been too busy drooling at the graphics.
On the subject of wanted ratings, they've changed how cops work. It's now a lot more realistic and less arcadey. Cops have to be able to see you to follow you, so it's possibly to give them the slip. If you get far enough away from them, then you get away scot free. However, if you run into some other cops, then they'll start giving chase too. Luckily it makes it easy for you by showing where all the nearby cops are, so you can try and avoid any in your path. Or you can use the old pay'n'spray to change your car's colour, but that only works if the cops can't see you entering.
Missions mostly follow the standard pattern of heading to a location on the map, but they've opened it up so you can be doing jobs for lots of different people at the same time. You also have a phone where you can phone people you know up for stuff, like jobs or a date or to hang out. Forming friendships is crucial as your friends will do favours for you. I'm not sure what use girlfriends are, except for costing you money and getting laid with.
Hand-to-hand fighting has changed with the addition of two extra buttons to attack with giving you more options, plus the chance to dodge and disarm people too. Gun fighting seems a tad clunky, but I suspect I'm just taking time getting used to the controls. Already I'm armed with a knife and a gun which is good, although I'm only mugging people with a knife so far. The people are much more aggressive too. If you hit another car, the occupants will sometimes get out and hurl abuse or attack you.
I've not really been paying too much attention, but they seem to be doing things this time rather than just walking about randomly. I've seen someone carrying shopping I think...or rather I think I saw them drop their shopping as someone walked in to them.