Why should we care you may ask? Because it is the evolution of a much larger specification that includes and merges HTML4, XHTML and the Dom Level Two. XHTML version Two, as a spec, has been dropped. Read about it in Dot Net magazine. (.net Magazine, Article: HTML5 Today, Dated 12/05/10)
With HTML5, one doctype - with no DTDs are required and it uses simplified character encoding (UTF-8). The style and script elements in HTML5 no longer need the type attribute as they default to text/css and text/javascript respectively. There is also the Web Forms 2.0 spec in HTML5, which means JavaScript is not necessary to do basic form validation.
HTML5 removes or re-defines presentational markup and offers the addition of new semantic elements for organizing content. The HTML5 specification also includes formulated foundation level Application Programming Interfaces. Some examples include: audio & video, inline editing, dragging & dropping, offline applications the canvas element, history, and web protocol.
See a Presentation of HTML5 planned specs at HTML5Rocks.com