The reason why they are working on a new protocol is because new parts of the BitTorrent protocol are no longer opensource:
This company, founded by BitTorrent inventor Bram Cohen, recently decided to close the source of some newer additions to the protocol. According to The Pirate Bay, this gives them too much power and influence.TPB's new filesharing protocol should be ready by early 2008. It's not sure how many torrent sites will adopt it but Mininova has already announced they will definitely support it.
Another reason for a new and improved protocol is the massive number of spammers and anti-piracy organizations that abuse the BitTorrent protocol, either to make money or to bust people who download infringing material. The new protocol will be designed with these potential problems in mind.
The protocol will most likely use the .p2p file extension compared to the .torrent extension BitTorrent uses right now. The good thing is that the .p2p files will be backwards compatible which should ensure a smooth transition from .torrent to .p2p files.
Source: Torrent Freak