The overhaul to the 2D sandbox, which rolled out to the Windows PC version last October, will be free to all Terraria owners. Update 1.2 for consoles includes the same features that was released to Windows PC, except with a handful of console specific differences.
The hefty update introduces a slew of bug fixes, improvements, new recipes and items. Changes to the graphics, NPC, mechanics and gameplay are also included. You can read the full change log on the official Terraria forums.
Re-Logic's adventure sandbox game was first released on Windows PC in 2011, and is currently available on Xbox 360, PlayStation 3, iOS and Android devices. The title's sequel, Terraria 2, was announced last September and will have 'infinite worlds' to explore and more biome diversity. It may arrive on multiple platforms around its PC launch, but will not see a release on the Nintendo 3DS due to system constraints.