Many of the sampled sound effects have been ripped from the arcade game and are being played back by the STE in stereo due to the wonders of DMA audio (much easier to code than I imagined!);
You can now hear the engines of CPU cars as you drive past them (or they drive past you!);
The graphics for the starting line have now been completed, with the supporting left/right beams and the checkered pattern on the ground now present;
The blimp/airship that moves from right to left has been implemented at the start and end of qualifying;
The bad flickering on the horizon has now been resolved for the most part (at the expense of the sky gradient).

You should be able to see the following new things in this version:

Sampled sound effects ripped from the arcade game;
Sound effect for overtaking/being overtaken by opponent cars;
Completed graphics for the start/finish line;
Blimp/airship flying across screen at the beginning and end of qualifying;
Caption on start/finish line moving between START/NAMCO/GOAL as per the arcade machine;
Horizon flickering effect fixed for the most part;
General bugfixes and some other stuff I've probably forgotten.