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Published 12:39 9 Aug 2016 BST
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From what we can gather the new version is two-tiered. As Kotaku reports, Nearby now shows you Pokemon that are in the vicinity of a Pokestop in your area. Each monster will show up next to an image of that location, as evidenced by this screenshot from Neogaf user Toki767.
When you tap on a nearby Pokemon it the app will take you to an overhead view of the app, where you're told where to walk to reach the Pokestop you need. This is how it looks in action.
The second section (refer to the lower half of Toki767's screenshot) is called "Sightings". Here you'll see wild Pokemon in your area next to a picture of long grass. You aren't told where they are or how far you need to walk to find them, but Pokemon will disappear from the indicator when you've gone too far. Expect a fair bit of aimless wandering and retracing your steps, then - we never heard Ash Ketchum complaining.
https://twitter.com/PokeSteal/status/762932533453524992
According to Forbes, Sightings works by "pulsing" the area around you every 10 seconds, which will tell you which Pokemon have spawned and which have hopped it somewhere else. The hope is that now the game won't show you Pokemon that appear to be within reach, but actually aren't anywhere near you.
The new system is in testing at the moment so keep in mind that it could drastically change again in a few weeks. But *fingers crossed* the game's most irritating feature is on the mend. Happy hunting.

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