When Sigil was first released in 2009 it was a fairly basic app that would let you load an Epub file, edit it on a text level, and then save the file. The current version of Sigil has moved far beyond its beginnings and its complexity and feature set are quickly approaching your average word precessing app.
The complete list of improvements can be found over here, but for the most part I'm going to skip over them here. The new features are going to useful, but I figured if I got bored writing about them most people would get bored reading about them. But there are some points worth noting.
One of the more interesting improvements is the new ability to insert and remove audio and video. The menu functions for image insertion and deletion were changed so they referred to inserting and deleting files, not just images. It's a subtle change but it also reminds us that average ebook developer could soon move beyond just the current basic images and text we're used to handling now.
Other improvements include changes to the spellcheck so you can add your own words as well as use more than one dictionary at a time. Sigil can also reportedly play the audio and video clips that you have inserted into the ebook, though that might depend on the video codexes you have installed on your computer.
Sigil is available for Windows and OSX. If you like you can create an Epub by typing it into Sigil and formatting it from scratch, or you can load and edit an existing file. You can also work from an existing html file and then save the output as an Epub ebook which will meet current Epub 2.0.1 standards. (Epub 3 support is on the todo list.)