I quite liked the EOS 1100D (but felt it was a bit dated despite being a bargain price) so was quite keen to try this to see what improvements Canon had made.
The answer is some, but probably not as many as I expected.
I'll list out the key areas where the EOS 1200D is improved over the 1100D
+ 18mp CMOS sensor (same as many other Canon's) up from the 12mp CMOS
+ Build does feel a bit better in the hand, the grip is now textured v the smooth one on the older model
+ The rear LCD is now 3" 460k dots v the 2.7" 230k EOS 1100D, quite a bit better, and sharper but not up to the 600d's high res
+ You now have full HD video 1920 x 1080 at 30/25fps v 1280 x 720 (mono no mic socket) sound levels can be adjusted, and movie length is now 29:59 secs rather than the 17 minutes on the older model
+ Raw can now be shot at 3fps v 2fps, the raw buffer is 6 frames
+ You have various creative filter "effects" you can apply to images, soft focus/toy camera etc etc
In other areas, the EOS 1200D is basically the same as the EOS1100D
Same Digic 4 processor
Same 9 point AF and CFL metering (with one cross type central AF sensor)
Spec is identical in other ways max shutter of 30 seconds to 1/4000 sec, 0.80x viewfinder the same too
**Note there is no AF for the video mode manual focus only** but you do have manual controls like exposure and white balance
SD card slot also sits in the main battery compartment as previous models (note tripod users), a minor niggle probably done for cost saving measures.
In the hand the AF via the viewfinder felt a touch more responsive v the 1100d, live view AF was still pretty slow and no obvious improvement seen here. (takes a few seconds for live view contrast AF to lock) This is ok for static subjects like landscapes, for normal shooting the viewfinder is a better bet.
So you get a 6mp bump in sensor resolution, and a better video mode and nicer LCD.
If you're looking for a bargain this hits the spot nicely and the 1200d is now a better buy than the 1100d brand new, though if you own the 1100d it's not really a big jump up. If you are willing to spend a little more and want something a bit higher up, look around for some clearance deals on the 650/700d. If you want the swivel LCD both have that, more features, better controls, somewhat larger viewfinder, and the ability to use dedicated wireless flash. Image quality is basically the same.
Canon have been fairly conservative with their update here, still it does have most of what a user would want at this price point. It's easy to use and a great camera for learning on. Like the 1100D HSS is supported with dedicated flashes (high speed sync for fill flash outside with a dedicated flash that supports this you can fill flash at all shutter speeds, useful in brighter light and at faster apertures), wireless flash is not built into the on-board flash. You also have full control over the camera as well as aperture, shutter, manual modes and of course raw capture. I could nit-pick a few areas the build is fine for the price you get what you pay for of course, viewfinder is a bit on the small side too would have liked to see an improvement there. However the price is low and you have to take that into consideration, and the bottom line is the camera is capable enough for most users needs.
If you're getting into photography a bit more a DSLR offers new users more control, the ability to change lenses, as well as better image quality and more depth of field control (ie blur backgrounds for portraits etc), over smaller sensor cameras. There is a significant difference here, but consider where you want to go with your picture taking, a system camera isn't for everyone and many DSLR users also use some of the better premium compacts for times they don't want to carry an SLR around. Some folks might be better served with a bridge model which has a big zoom range and no need to change lenses, and some prefer the compact mirror less models, so think about what you want. You're buying a more flexible tool here no question, and Canon's system is huge in terms of lenses available, but it's not for everyone nor does it guarantee you'll instantly get better photos.
Take note with the kit lens the EF-S 18-55mm f/3.5-5.6 III does not have stabilisation, the IS II version kit bundle does
The good news is that the improvements do bring a few lagging areas on the 1100D more up to date (LCD screen, higher res sensor and a full HD video) It's an excellent way to start your DSLR journey, and the price is only going to go down even more over time.