The recent account activity review feature will add a new view to the Microsoft account service page that will let you review recent actions associated with your Microsoft account, such as sign-ins, account recovery attempts, and more. Users will be able to view the location, IP, date/time, device/platform, and browser/app associated with each account activity.
This will make it easy to see whether there are unexpected activities associated with your account (e.g. someone signing into your Outlook.com email account, or using your Microsoft account with their Windows Phone devices). A "this wasn't me" button will let users report any suspicious activity to Microsoft.
The new account recovery option takes the form of a security code that can be written down and stored in a safe place and then used at a later date to recover access to the account (e.g. if you forget your password, or if someone else changes the password). The random string can be generated using the Microsoft account website. Liveside.net speculate that the code will be used in conjunction with another form of identification, such as an alternate email address or mobile device. Liveside.net also suggest that the current recovery method (security question) may be retired and replaced with the recovery mode method. Security questions (e.g. what's your favourite colour?) are generally regarded as being relatively weak security mechanisms.
The updated security notifications feature will allows users to have greater control over how they are notified if Microsoft thinks someone is trying to take over / access their account. Currently these warnings are sent to the primary email address associated with the Microsoft account, but the update will allow such notices to be also sent to a mobile device or secondary email addresses.
Liveside.net does not have any information on when the new features will become available, but it is likely to be within the next six months or so. Given the importance of data and services tied to the Microsoft account (essentially the gateway to the Microsoft ecosystem) anything that improves security is to be welcomed.
More details at Liveside.net.