First changes to implement the 2.5 snapping proposal (discussed back in May and recently on IRC).

http://wiki.blender.org/index.php/User:Theeth/Snapping

The new widget isn't there yet, but the rest works, including:

Increment (gears) is now a snap mode

Ctrl click to toggle snap on or off (in transform and 3d view)
Shift+Ctrl click to select snap mode (3d view only)

Snap status (on/off) is persisted in tool settings, no need to always turn it back on when entering transform.

It's still possible to have something resembling the old system by editing the transform modal keymap to snap on on ctrl press and snap off on key release.

source/blender/editors/transform/transform.h

@@ -83,11 +83,13 @@ typedef struct NumInput {
 */
 
 typedef struct TransSnap {
+	short	mode;
 	short	modePoint;
 	short	modeTarget;
-	short	mode;
+	short	modeSelect;
 	short	align;
 	short	project;
+	short	peel;
 	short  	status;
 	float	snapPoint[3]; /* snapping from this point */
 	float	snapTarget[3]; /* to this point */
@@ -371,7 +373,7 @@ typedef struct TransInfo {
 /* TransInfo->modifiers */
 #define	MOD_CONSTRAINT_SELECT	0x01
 #define	MOD_PRECISION			0x02
-#define	MOD_SNAP_GEARS			0x04
+#define	MOD_SNAP				0x04
 #define	MOD_CONSTRAINT_PLANE	0x08
 
 
@@ -412,14 +414,9 @@ typedef struct TransInfo {
 #define TD_MIRROR_EDGE	 	(1 << 16) 	/* For editmode mirror, clamp to x = 0 */
 
 /* transsnap->status */
-#define SNAP_ON			1
-#define SNAP_FORCED		2
-#define TARGET_INIT		4
-#define POINT_INIT		8
-
-/* transsnap->modePoint */
-#define SNAP_GRID			0
-#define SNAP_GEO			1
+#define SNAP_FORCED		1
+#define TARGET_INIT		2
+#define POINT_INIT		4
 
 /* transsnap->modeTarget */
 #define SNAP_CLOSEST		0