We've reflected many comments about BIP39 wordlist from the community and I think the wordlist is much better now. Specifically we removed many of theoretically offensive words as well as we implemented algorithm for detecting words with similar characters (cat/eat) and we resolved these duplicities. I'm now quite happy with the wordlist and I want to ask you for next (final?) round of comments.
From other features, we added password protection of seed and seed hardening (against bruteforcing) using Rijndael cipher. This has been chosen because its blocksize can be 128, 192 or 256 bits, so it fits length of desired seeds. Also there are Rijndael implementations in every language. Btw password protection has one interesting feature - plausible deniability. It allows user to have one mnemonic and by using it with different passwords, it will generate different BIP32 wallets.... (wink wink)
I want to be pretty clear that we need to close this topic somehow, because we want to use such algorithm in Trezor (which deadline is coming quick) and also other wallet developers want to implement such algorithm into clients to be compatible with Trezor. There were quite strict requirements for such algorithm (like the possibility to convert mnemonic to seed as well as seed to mnemonic) and I think we found a good solution. I'm wildly asking you for constructive comments, but saying "it's a crap, I don't like it" won't help anything.
Thanks,
slush