Compared to previous versions of Joomla!, the Extension Manager is finally worth its name: the new options here give you new control over extensions. Navigate to Extensions | Extension Manager (the comparable menu option was previously called Extensions | Install/Uninstall) to have a look at the new layout and functionality:
In Joomla! 1.5, the main purpose of the Extension Manager screen was to allow you to install or uninstall extensions. Although you'll still see the familiar Extension Manager: Install functionality when you open this screen in Joomla! 1.6, you'll notice that the Extension Manager now contains four additional tabs, apart from the default Install view: Update, Manage, Discover, and Warnings.