New grooves do not have as steep of sides. Think of the new more like a V and the old more like a U. In essence they have reduced the volume of the groove.

ok heres the whole thing wich isnt even a really big deal the square groves take in more grass particles and moisture allowing more club face to ball contact causing more spin the v grooves > look like that and have less room for those moisture and grass particles to collect allowing less club face and ball contact equals less spin explain it enough

From what I understand there are three different type of grooves ( U, V, and square groove). The square grooves are more forgiving in longer cut  grass such as the rough. These grooves allow for more moisture and grass to fill the groove therefore, allowing the golfer to get more spin out of the rough. These are the grooves, from my understanding, that the USGA has decided to ban from the PGA tour as well as the Nation Wide tour for 2010. This is why many players are buying wedges before the manufacturers ship out the new models designed to satisfy current USGA rules. For regular players who will not be participating in any USGA events these wedges are fine, for those who will be they are not. As far as the U and V grooves are concerned I believe they do not very much other than manufacturer development or preference. I have included a link that should be helpful in the more technical aspects.

http://www.golfersguide.com/golf/golf-blog/making-sense-of-the-new-groove-rule-more-difficult-than-pitching-out-from-the-rough.html

You might also want to look into the recent Phil Mickelson debacle on the tour concerning his use of old ping wedges.

Joseph-

There's a great overview at http://www.titleist.com/news/newsdetail.asp?id=716&category=technology

Here's an image from the article that shows a cross-section of a pre-2010 conforming groove followed by a representative new conforming groove followed by an old V groove: