According to DPReview
Changes compared to the non-VR version
As with Canon's 18-55mm IS upgrade, there are rather more changes from the previous Nikon 18-55mm than at first meet the eye. The physical similarity between the lenses masks a multitude of differences; most notably the new lens has a more complex optical formula of 11 elements in 8 groups as compared to 7 elements in 5 groups, and interestingly the new lens loses the Extra-low Dispersion (ED) glass element of its predecessor. The use of ED elements allows superior correction of image aberrations in simpler lens constructions, and presumably Nikon consider the more complex design of the new lens renders their use superfluous.
Other changes include a modest increase in size, with about 3mm added to the diameter and 6mm to the length, and a 60g increase in weight. As seems to be the current fashion, the smooth black plastic of the old lens has been replaced by a new stippled matte black finish, which resembles magnesium alloy and matches the D60 body. Other differences include a larger rear lens element (20mm vs 15mm), an additional circular flare-cut diaphragm placed in front of the aperture assembly, and new 'Super-Integrated Coatings'. Overall this newcomer is clearly a completely different beast to the old lens, and as the old 18-55mm had an unusually high reputation for image quality (for a kit lens at least), we will be interested to see if the new version maintains this standard.
the optics are at least as good as before ... Nikon have taken what was already a good lens and made it even better; it can't be overstated how useful VR can be in expanding photographic possibilities when using a camera handheld.
Some people in the DPReview forums stated they felt the ED lens had better image quality.