Today, notch announced the release of Minecraft Beta 1.3, changelog after the break.

“* Implemented a new lighting engine with the help of MrMessiahs (can be turned off)
* Changed the options around, added a new “Graphics options” button
* Added beds. If all players in a map sleeps in a bed during night, the game immediately skips until morning
* Added three new half-size blocks
* Added Delay/Repeater redstone dust blocks
* Added whitelisting to the server. To use, enter “whitelist ” where cmd is “on”, “off”, “add ”, “remove ”, “list” or “reload”
* New save file format, old maps need to be converted (that might take a while..)
* It’s now possible to have more than five save slots, and to rename saves
* Scrollbars in both the texture pack list, and in the map selection screen
* Replaced the Mojang splash image to reflect the new logo colors
* .. and a bunch of bug fixes and tweaks!”

You can make beds this way: (X = wool, Y = planks)
Row 1:
Row 2: XXX
Row 3: YYY

I personally think that beds are a great addition! What do you think about this update?