Merlin is the name of a small falcon, an Ancient, and as Olli mentioned, the code name of our next major release. Since we released Opera 8.5 today without banner ads, we thought we'd tell everyone some of the things they have to look forward to in the future from Opera. We've been working hard on the next major release for quite some time and we're getting ever closer to releasing a preview.
Here at Opera, we like acronyms. In QA, we use acronyms and abbreviations every day. We have stuff called SPARTAN, OASIS, SNORRE, BTS, etc. In fact, we like acronyms so much, we've stuffed a bunch of them into Merlin. You might recognize a couple: XSLT 1.0, WF2, a new IMAP back-end, and some CSS3 Selectors. Of course, we can't fill Opera with just acronymns, so we stuck in designMode (rich text editing). Oh, there's more, but we can't reveal all our secrets now.
Don't worry, we also had to fix a bunch of bugs. So, we made OBJECTs and IFRAMEs respect z-index, improved our margin-collapsing code, fixed problems with width inheritance for positioned elements, and nearly completed support for Acid2. There's way, way more to talk about, but that'll come later.
Enjoy 8.5 and look forward to Merlin. It's going to be great!