A "next generation" Vim effort. Major overhaul to support more powerful plugins and better integration with tools such as IDEs.
Ranked in these QuestionsQuestion Ranking
Pro Still vim but with upgraded features and some issues fixed
NeoVim was a complete rewrite of Vim to add new features and fix underlying issues with the Vim code base. The keybindings and configuration are the same as vim, so the switch can be pretty simple.
Pro Powerful plugin model
Vim plugins have always been useful, but tied to specific languages. Neovim's architecture provides better separation between plugins and the core product, so that plugins are completely flexible and can be written in any language.
Pro Better integration with external tools
The core text editor is "headless", ie detached from the user-interface, so other programs can hook into it. This enables better integration with IDEs and browsers, where "Vim mode" has typically been a poor substitute because it was a partial rewrite, or a partial port at best. One of the advantages of Vim has always been ubiquity and Neovim makes it even more ubiquitous.
Pro Modern Codebase
As a refactor over Vim, NeoVim has greatly improved its code base. For example, some functionality is handled by libuv, the same code base that powers Node.js.
Pro Built-in terminal emulator
Pro UI Agnostic
The core functionality is handled apart from the UI, meaning that neovim can be embedded into any other gui system, such as Atom.
Con Limited Cross-Platform Support
Not yet available on Windows (and other legacy platforms).
Con No graphical editor yet
At time of writing no equivalents to gvim exist.
Con No stable release yet
Neovim is as of yet in an unstable point in it's development. There is no stable release and using neovim for the moment should be done with caution as many features may change in the future.