Category blocking allows publishers to block ads from an entire category (sex, politics, weight loss, etc.).
Additional categories they've added include, Arts & Entertainment, Beauty & Personal, Computers & Electronics, Finance, Health, Hobbies & Leisure, Home & Garden, Internet, Job Listings, Real Estate, Travel & Tourism, and Vehicles...
|Sample screenshot courtesy of AdSense|
It appears that the categories currently in place for everyone have been consolidated into the above.
Has Category Blocking helped increase your earnings?
For me, it doesn't appear to have much effect. I still earn good money on such ads as Ringtones, and Get Rich Quick.
Where I have a problem are ads that match the keywords on my site, but are out of context. For example, on my cemetery records site, in which the primary audience are genealogists, I still get a lot of funeral planning ads. The ads are still related to "cemetery", but are out of context with genealogy.
Read the full announcement on the AdSense blog.