The big thing, is the increase in the number of filters that XT32 brings.
As per the Audyssey webpage.
http://www.audyssey.com/audio-technology/multeq
"Audyssey room correction technology comes in four solutions: MultEQ XT32, MultEQ XT, MultEQ and 2EQ. While they are all built on the same core science, each is designed to operate within the constraints of the available DSP processing power.
MultEQ XT32
Our newest and most accurate room correction solution with more than ten thousand individual control points allowing finer details of the room's problems to be captured and corrected. The ultra high resolution filters are applied to all channels including the subwoofers, with the most obvious benefit being heard in the low frequency range where correction is needed the most.
MultEQ XT
Our advanced resolution room correction solution with high resolution equalization filters for satellites and subwoofers. Most products with MultEQ XT are installer-ready and can be calibrated by an Audyssey Registered Installer to provide even higher performance for even the most demanding large or odd-shaped rooms.
MultEQ
Our standard resolution room correction solution that uses mid-level resolution filters for satellites and subwoofers."
Filter resolution (satellites)
MultEQ XT32 has 512x
MultEQXT has 16x
MultEQ has 2x
Filter resolution (subwoofer)
MultEQ XT32 has 512x
MultEQXT has 128x
MultEQ has 128x