A bit more on the incompatibility:
ClientProtocol and namenode still have the original method and implementation. So pre-1.0 clients can still talk to 1.0.x namenodes. The 1.0.x client, on the other hand, internally calls only the new method; The original create method is never called. Since pre-1.0 namenode does not understand this new method, 1.0 clients cannot create files on pre-1.0 clusters. The patch makes client call the new method only when createParent is set to false. All others will be fulfilled by the original method.
The protocol-level incompatibility still exists, but that only manifests when the new file system level method, FileSystem#createNonRecursive(), is explicitly called. Normal use cases within hadoop do not use this method. Currently only SequenceFile#createWriter() calls it when caller specifically asks for it. This was added to support HBase.
In summary, 1.0.x and pre-1.0 are incompatible, but become interoperable with this patch for most use cases.