X Server 1.7 introduces Xi2, Multi-Pointer X, and other features, but still X Server 1.6 has been pretty good release. Keith Packard, the release manager for this series, is in fact working on putting out another point release. On Sunday afternoon Keith had put out the first release candidate for X Server 1.6.3.
X Server 1.6.3 so far includes 12 fixes for different areas from RandR to EXA. The change-log with source download links for X Server 1.6.3 RC1 can be found on the X mailing list. X Server 1.6.3 will be released once none of the other developers have new patches they wish to see integrated in the server 1.6 branch.