We support OpenID 1.1 and 2.0 with lightopenid in our PHP project. A press release is announcing the release of "OpenID Connect".
The news notes heavy support from Microsoft of the new standard, reporting at the RSA 2014 conference, underscores reliance on OAuth 2.0, and is written in business speak.
So as a consumer of OpenID, what actually has changed and is there backwards compatibility?
Converting comment to answer to get it off the unanswered list:
Most of this is answered here: http://openid.net/connect/faq
Backwards compatibility only extends so far as to provide backward compatible user ids, it seems. Don't have a great official document to support this in detail though.