A new CraftBukkit Recommended Build (1.2.5-R1.0) that provides Minecraft 1.2.5 compatibility is now available.
Will plugins break with this build?
Unless the plugin developers of your plugins have been keeping up with Bukkit development, plugins will most likely be broken due to the recent optimisation and cleaning of our code. However, if the plugins you use have already been updated to work with at least 1.1-R7 or at least 1.2.3-R0.1, then you should be fine.
For more detailed information on what is contained in this update, please see the changelog here.