Being a third-party effort, it's important to note that the firmware - dubbed "Magic Lantern" - isn't sanctioned or supported by Canon. As with any third-party firmware, photographers considering using Magic Lantern must do so at their own risk, and in the knowledge that if they experience problems, they may well end up with an expensive, camera-shaped paperweight.
With that important point made, Magic Lantern looks to add some pretty interesting capabilities to the Canon 5D Mark II. All of the changes made relate to the video mode, and have been made with independent film makers in mind. The initial pre-release Magic Lantern v0.1.3 build works alongside Canon's current v1.1.0 firmware for the camera. The third-party firmware is triggered using Canon's own firmware update menu option, and doesn't permanently overwrite that already installed in the camera. Instead, Canon's official firmware is shut down and replaced in RAM by Magic Lantern. After every time the camera is fully rebooted - for example after changing the battery or entering power saving mode - the firmware update menu option must be used to relaunch the third party firmware.
Perhaps the most significant change is that Magic Lantern disables the 5D Mk II's automatic gain control, with digital gain instead fixed at +12 dB and analog gain at +10 dB. Magic Lantern also adds a stereo audio meter to the top of the rear-panel LCD display during video recording, as well as crop marks for 16:9, 2.35:1 and 4:3 aspect ratio video. There's also an on-screen indication of overexposed areas of the video which functions in near-real time, albeit with no manual control over the exact threshold at which the indication is triggered.
There are a few notable provisos and limitations to Magic Lantern's operation of which 5D Mark II owners will want to take note. When Magic Lantern is in use, only the external microphone jack can be used, with the camera's internal microphone disabled altogether. Likewise, the Canon 5D Mk II's USB, composite video and HDMI output connectivity are all disabled when running Magic Lantern firmware. The function of the Picture Style button has been changed to bring up an event viewer for the programmer's use, and Canon's onscreen menus are said not to work correctly when Magic Lantern is running. It also isn't possible to enable or disable individual changes in the firmware - for example, you can't opt for the manual gain control without also having the overexposure display enabled.
Some of these limitations may be removed in the future, and the Magic Lantern website also includes a lengthy to-do list of hoped-for features that might be included in future versions if found feasible. Source code for Magic Lantern is also being offered on the website, and the firmware is said to allow programmers with the relevant know-how to write their own extensions as well.
For more details or - if you're happy to accept the risks of using it - to download the Magic Lantern firmware and source code, read the Magic Lantern wiki.