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3.6 is going to be one of those major updates, but it's been pushed back to some nebulous time in the first quarter of 2010. In that vein, Mozilla is planning (or at least hoping) to send a release candidate version of 3.6 to volunteer testers this Friday.
It's critical for Mozilla to get updates rolling out more quickly for Firefox users, especially with Chrome making progress in winning a few progressive hearts and minds. There's not much else going on in 3.5.7 — just a crash fix and a fix for interacting with servers that support NTLM authorization. Exciting stuff.