Android 4.2 sports a bunch of different features and optimizations, but one of the biggest standouts is definitely going to be Photo Sphere. Android-based phones have had panoramic photo modes for a while, but this is a big change to that.
Apple's iOS 6 came in late to the party with their own mode, but Google are really ramping up the feature on Android 4.2. On the new OS, users can take pictures in any direction, with the OS doing the stitching of images together. It might not sound like a lot, but this is actually quite an amazing feature.
This means you can take pictures not just left to right, or right to left, but up and down, creating a near 360-degree image, which takes viewers "inside of the scene". Photo Spheres are stored as JPEG files, with all of the information required to look at them embedded as open XML metadata in the image itself.
You can check them out on your phone, share them through Google+, or better yet, publish them to Google Maps for the rest of the world to see. Impressive. I can't wait to get my hands on a Nexus 4.