Google have just announced that the Chrome OS beta has hit R12 release 0.12.433.38 which includes Chrome 12 Beta, new trackpad, new flash player and several "stability and functional improvements over the previous release". This new release includes various security fixes:

Disallow root escalation by creating /var/lib/chromeos-aliases.conf and inserting commands. [Credit to Chrome OS Team (Sean Paul)]

Disallow modification of about:flags in Guest mode [Credit to Chrome OS Security Team (Jim Hebert)]

Multiple package updates (openssl, dbugs, pango, sudo, strongswan, acl, libxml2, dhcpd) [Credit to Chrome OS Security Team]

There are a tonne of new features in Chrome 12 as well as a number of Chrome OS improvements such as:

File browser

Shiny new look

Improvements to GSM support

Verizon activation improvements

New Flash player

Feedback link is now under the wrench menu ("Report an issue")

3G connection to the carrier fixes

Wi-Fi connectivity/Out of the Box fixes

New trackpad and sensitivity setting adjusted

Auto update engine and debugging improvements

Power optimizations

GTalk video/chat optimizations

Improved on screen indicators: brightness, network status, update icon

Known issues include:

[Bug 15211] Angry Birds displays black screen in SD and HD version during intro video

[Bug 14592] 3g Activation does not complete first try but succeeds on second after a workaround

[Bug 13269] Chat window refuses to open, even if contacts list will

[Bug 12671] Encountered the recovery screen upon resuming from suspend (hard reboot helps)

[Bug 15085] "He's Dead Jim" message while playing specific video in 720p