In the Blend Tree Editor, you define blending parameters and preview the blended animations in a 3D view. Blend Trees, like Animation Clips, can be used as states in a hierarchical State Machine.

Unity’s animation system Mecanim has been updated to allow developers to create blend trees using fewer nodes and in a more flexible and intuitive way with 2D blend nodes.

“These tools will allow animators to work directly in Unity to create advanced and detailed animation blend trees and state machines for incredible and natural character animation.” ...

Unity Engine 4 will let devs “do so much more with so much less” New animation tools, Flash, and Linux support will be included in update.