IPv6 is a new layer 3 protocol (see linuxports/howto/intro_to_networking/ISO - OSI Model) which will supersede IPv4 (also known as IP). IPv4 was designed long time ago (RFC 760 / Internet Protocol from January 1980) and since its inception, there have been many requests for more addresses and enhanced capabilities. Latest RFC is RFC 2460 / Internet Protocol Version 6 Specification. Major changes in IPv6 are the redesign of the header, including the increase of address size from 32 bits to 128 bits. Because layer 3 is responsible for end-to-end packet transport using packet routing based on addresses, it must include the new IPv6 addresses (source and destination), like IPv4.
Because of lack of manpower, the IPv6 implementation in the kernel was unable to follow the discussed drafts or newly released RFCs. In October 2000, a project was started in Japan, called USAGI, whose aim was to implement all missing, or outdated IPv6 support in Linux. It tracks the current IPv6 implementation in FreeBSD made by the KAME project. From time to time they create snapshots against current vanilla Linux kernel sources.
USAGI is now making use of the new Linux kernel development series 2.5.x to insert all of their current extensions into this development release. Hopefully the 2.6.x kernel series will contain a true and up-to-date IPv6 implementation.