Welcome edolyne, nice to see another
potential Pentax user here.
--The viewfinder has been improved and will now offer 100% coverage, great for accurate composition.
100% coverage but slightly lower magnification.
--The body is now made of magnesium alloy, this reduces the weight of the camera and also makes it a more robust body than the K20D which I believe was made from molded sheet metal.
The K20D is a heavy-duty plastic, similar to most advanced non-magnesium DSLRs. If you were dropping them off a rooftop, the magnesium might help for sturdiness, but I think the main real-world benefits are weight - and perceived sturdiness. The K20D is already very sturdy and you can find lots of reports of various Pentax DSLRs (especially the K10D and K20D) going through all sorts of abuse with no ill effects, including being shot into space and being held under running water.
--The weather sealing has been improved, they not only have added additional weather seals(to make up for the added ports) but the most notable improvement is that it is now cold resistant down to 14 degrees. Note: this temerature is actually lower than some of the pro level body's offered by N&C which are only rated down to around 32 or 34 degrees.
The cold is new, but the water/dust resistance is the same I believe. There are more seals in the K7 for the same reasons there's more seals in the K20D than the K200D - there are more buttons/dials/openings. In any case, the K20D certain offers
fantastic weather-sealing, I assume the K7 should be just as good.
--Shake reduction has been improved and now also compensates for +/- 1 degree and automatically aligns the horizon, it also has an electronic level built in which will help you align your shot when not on a tripod.
The rotation is manual, I don't believe there's any kind of horizon adjustment. There is a built-in digital spirit level, which I am very excited about!
That being said - the more that I read about the K7, the most excited I am. I love my K20D but
wow, some of the K7 features are killer!
RBennett, maybe the reasons why I am eager to go to a K7 from my K20D may help you decide... this is why I'm excited:
Smaller/lighter/more distinct grip. The ergonomics are already great but I am all for more features in a smaller/lighter body!
Better white balance - again, the K20D is quite good (notably better than the K100D) but you can always get better!
Metering - I usually pick spot or center-weighted to get what I want, maybe the advanced metering will allow me to keep it in center-weighted and get consistent results without having to think about it.
Did I mention the spirit level in the viewfinder?

Autofocus - I haven't heard much specific but it sounds like it is pretty dramatically improved. I would love to see parity with the other manufacturers. The AF assist light doesn't hurt, though obviously it's not to be used on Haunted Mansion.

High-resolution, larger LCD. 2.7" isn't bad but the extra resolution will really be nice - this is one thing that the K20D probably should have had all along.
720P 30fps video. This means no more having to carry around a PnS to do quickie short videos, like the kind we'd take at WDW. Of course, you can get more serious - I love the
shots of the K7 with a big Rode microphone on top at Ned Bunnell's blog.

Better high ISO noise control - again, the K20D is very good but there's always good for improvement! It's hard to say how it will turn out once the camera is on final firmware and we see samples, but some have talked about levels only one stop below the D700... that's pretty big talk but I have a lot of faith in the Samsung sensors!
The other new features are nice but the ones listed above are the things that are making me really want a K7 ASAP.

(I expect to wait until closer to the holidays, but it depends on how quickly the price drops and how my finances ebb and flow between now and then! I definitely hope to get one before my next Disney trip!)