If I understand correctly, this version is using the render engine from the SL Viewer 3.5. That would mean the engine is Materials Capable.
There are bug fixes that deal with mesh objects download and rigged mesh causing crashes. Memory problem detection has been improved, meaning less crashes. Also changes for more efficient use of memory. FMOD Ex has been updated, this has to do with sound other than voice.
There is an experimental version of the viewer: 126.96.36.199 that includes Materials support from SL Viewer code version 3.6 and the Mesh Deformer. This version should have those features enabled on both OpenSim and SL grids.
Scroll down the blog page to find the 1.26.9 Experimental download.