Here goes...
1.0 is the firmware that the PRS-505 initially shipped with in the US.
1.1 is the updated US firmware, and the current US firmware. It brought EPUB support, PDF reflow and the "delete book" menu option... possibly a few other things I can't think of right now.
1.2 is the current UK firmware, and the firmware the PRS-505 initially shipped with (and still does) in the UK. From what we can tell, the only difference is the date display format (Europe uses DD/MM/YYYY, US uses MM/DD/YYYY).
1.3 is the current French firmware, and the firmware the PRS-505 initially shipped with (and still does) in France. The menu is in French, and apparently the firmware is a little bit more advanced in some areas, like localization. I'm not too familiar with it, someone should be along shortly to give you more info. But AFAIK it brings no new user functionality.
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