The first beta of Paint.NET v3.5 is now available! Changes since version 3.36:

Refreshed user interface with new icons and visual styling. On Windows 7 and Vista, it is enhanced for Aero and "glass".
Now uses and requires .NET 3.5 SP1, which has many built-in performance improvements.
New effect: Blurs -> Surface Blur, by Ed Harvey
New effect: Distort -> Dents, by Ed Harvey
New effect: Distort -> Crystalize, by Ed Harvey
Effect dialog responsiveness has been greatly improved.
Images open much faster, especially on single CPU systems.
Selection outline is no longer animated. Instead of "dancing ants", an antialiased and stippled "XOR" outline is drawn.
Startup performance on most systems will be better by about 20%.
Memory usage has been greatly reduced when more than one image is open.
The font system for the Text tool has been completely rewritten, and problems with missing fonts and crashes should be a thing of the past.
On Windows XP and Vista, the Text tool has improved text rendering quality (it uses GDI instead of GDI+).
On Windows 7, the Text tool will use DirectWrite (instead of GDI) which gives even better performance and quality.
The toolbar font list has improved usability, rendering quality, and significantly improved performance.
The toolbar font list no longer requires an application restart to recognize newly installed fonts.
When many fonts are installed, both memory usage and startup performance have been greatly improved.
Installation prerequisites are now installed automatically, such as .NET Framework and Windows Installer.
Updates can now be downloaded in the background, and installed automatically once you exit the application.
General rendering quality has been improved when zoomed in.
Added a "Utilities" menu. Updates, Languages, and Plugin Errors have been moved here.
Added a "Manage Fonts" command to the Utilities menu.
Clicking the middle mouse button on an image thumbnail will now close the image.
Improved the Unfocus effect.
The DirectDraw Surface (.DDS) file type now allows you to select the resampling algorithm for auto-generated mip-maps.
A processor that supports SSE is now required (almost all CPUs purchased this decade satisfy this).
Fixed an issue with Gaussian Blur and its treatment of alpha values.
Fixed a crash with the "Units" selector in the toolbar.
When zoomed in, it is now much easier to resize a very small selection.
Now includes a Russian translation.

The second beta is now available. Here is the list of changes from the first beta:

The menu bar was rendering incorrectly for certain themes (Windows 7 / Vista).
Some items were not showing up in the 'Recent Items' jump list (Windows 7).
Clicking on the canvas straight from the menu would cause the paintbrush to draw a long streak.
Copy+Paste would sometimes miss a pixel edge on the right/bottom sides, when using Fixed Ratio / Fixed Size modes.
Fixed a crash when moving pixels off-canvas, switching tools, then trying to move the pixels back onto the canvas.
Fixed some messed up rendering for IndirectUI effect dialogs (Windows XP).
Performance is improved when switching between images that have lots of layers.
Aero 'snap' wasn't working when dragging part of the glassy area of the toolbar (Windows 7).
Added a new menu item, Window -> Glass Dialog Buttons. You can use this to disable the "glass footers" for dialogs (Windows 7 / Vista).
Glass Dialog Buttons are now disabled when font smoothing is disabled.
If an e-mail program isn't installed, the error message for Help->Send Feedback is more informative.
"Centimeters" was being truncated in the toolbar.
The shape tools were not using pixel snapping.
Layer names with ampersands were not showing up correctly.
Updated the internal list of incompatible and unstable plugins, which are then blocked from loading.
Fixed a crash with the Rectangle Select tool if "Fixed Size" mode was used and negative numbers were entered.
Fixed an access violation due to a race condition in finalizing effect rendering versus un-write protecting the layer's pixels.
Fixed an access violation in the renderer for the background transparency "checkers".
Fixed a crash when you would resize a selection to 0-width and/or 0-height, then expand it.
Fixed a crash due to an overflow that prevented very large images from working (64-bit only).
Fixed a crash with scanning/printing.
Fixed the status bar's progress bar showing up and doing nothing for codecs that don't report saving progress, such as JPEG.
Fixed a major issue with the readability of the "update is available" dialog in any non-English language.
Fixed a crash with the Zoom tool.
Fixed some really weird scroll-flickering with the Text tool.

* Fixed a performance glitch with some tools, where the action and subsequent undo/redo would be slow.
* Improved temporary memory usage of commands in the Image menu.
* Reduced disk space use by about 12MB by using NTFS compression on installation files used for staging (.MSI) and diagnostics (.PDB).
* Fixed many tools' clipping, with respect to an active selection.
* Improved compression for PDN files.
* Fixed many small miscellaneous crashes and glitches.

This release focused on improving performance and reliability, reducing memory usage, upgrading to the latest .NET Framework version, and refreshing the user interface for Aero and glass (Windows 7 / Vista).
- New: Refreshed user interface with new icons and visual styling. On Windows 7 and Vista, it is enhanced for Aero and "glass".
- New effect: Blurs -> Surface Blur, by Ed Harvey
- New effect: Distort -> Dents, by Ed Harvey
- New effect: Distort -> Crystalize, by Ed Harvey
- New: Russian translation.
- Performance and memory usage have been extensively optimized throughout the entire program.
- .NET Framework 3.5 SP1 is now required, which has many built-in performance improvements.
- Disk space usage has been reduced by about 12MB by using NTFS compression on installation files related to staging (.MSI) and diagnostics (.PDB).
- Compression for .PDN images has been improved.
- Effect dialog responsiveness has been improved.
- Images open much faster, especially on single CPU systems.
- Startup performance on most systems will be better by about 20%.
- Memory usage has been reduced when more than one image is open.
- Rendering quality has been greatly improved when zoomed in.
- The selection outline is no longer animated. Instead of "dancing ants", a context-sensitive "XOR" stipple pattern is drawn. - This has allowed for improved performance and lowered CPU consumption (and longer battery life).
- The font manager for the Text tool has been completely rewritten, which fixes many problems seen with crashes and missing fonts.
- On Windows XP, the Text tool has improved reliability and font selection (it uses GDI instead of GDI+).
- On Windows 7, the Text tool will use DirectWrite (instead of GDI) which gives better performance and greatly improved quality. On Windows Vista, you may install DirectX 11 to enable this feature; otherwise GDI will be used.
- The toolbar font list has improved usability, rendering quality, and significantly improved performance.
- The toolbar font list no longer requires an application restart to recognize newly installed fonts.
- When many fonts are installed, both memory usage and startup performance have been greatly improved.
- It is now drastically easier to move a very small selection.
- All installation prerequisites are now installed automatically, such as .NET and Windows Installer.
- Updates are now downloaded in the background, and installed after you exit the application. In previous versions, this was a foreground task and you could not use Paint.NET while the update was downloaded.
- Added a "Utilities" menu. Updates, Languages, and Plugin Errors have been moved there.
- Added a "Manage Fonts" command to the Utilities menu. This will launch the built-in Windows font control panel.
- Clicking the middle mouse button on an image thumbnail will now close the image.
- Improved the Unfocus effect.
- The DirectDraw Surface (.DDS) file type now allows you to select the resampling algorithm for auto-generated mip-maps.
- A processor that supports SSE is now required (almost all CPUs purchased this decade satisfy this).
- Fixed an issue with Gaussian Blur and its treatment of alpha values.
- Fixed a crash with the "Units" selector in the toolbar.
- Fixed a crash due to an overflow that prevented very large images from working (64-bit only).
- Fixed many other miscellaneous glitches and crashes.
- The Korean translation has been removed. Sadly, we were unable to find the resources to complete this.

- New: For Windows 7, added taskbar progress reporting for long running operations (effects, adjustments, Image->Resize, save, install)
- Made some corrections to the French translation
- Running setup with /auto will no longer launch Paint.NET when it's done
- Fixed an issue where Paste into New Image would refuse an image on the clipboard, even if regular Paste would take it
- Fixed a race condition with Edit->Paste and Image->Resize whereby it would take up 100% CPU and take between 1 minute to 1 hour to finish
- Fixed an issues with Copy/Paste where it would leave an extra line of transparent pixels on the left, top, right, and/or bottom edges
- Fixed lag with the paintbrush tool that was being seen on some systems
- Fixed some issues with the paintbrush and eraser tool being misaligned when zoomed in
- Fixed a crash that would happen at (seemingly) random times, such as after drawing with the paintbrush tool, on some systems
- Fixed a minor and obscure rendering glitch with the Move Selected Pixels tool
- Fixed an issue with glass over Remote Desktop or Windows 7 Virtual PC
- Fixed a minor glitch whereby the "Unsaved Changes" confirmation dialog could never finish rendering the image thumbnail if one of the Move tools was active