Apple has quietly released the OS 9.2.1 update. It's available now on the Mac OS X home page - look for the "Classic Update" link on the right-hand side of the page. It's an 82mb file, and both one-piece and multi-part downloads are available. It does not show up (yet?) on Software Update.
Important: From the online Read Me file:
"You can install this version of Mac OS 9.2 on any of the following computers: Power Mac G4, Power Macintosh G3, PowerBook G4, PowerBook G3 (except the original PowerBook G3), iMac, and iBook."
In other words, OS 9.2.1 can only be installed on machines that are capable of supporting OS X. The Read Me contains no information detailing what's been changed, other than offering "improved Classic compatability."
Mac OS X Hints