Microsoft has released Visual Studio Code 1.98, the latest version of its popular code editor, which introduces significant enhancements to the GitHub Copilot AI coding assistant. The new features, available in the February 2025 release, aim to improve the development experience with advanced capabilities and refined user interfaces.

One of the most notable additions is the support for notebook files in Copilot Edits, allowing developers to use the AI-powered coding assistant with the same experience as editing code files. This feature is currently available in preview mode, exclusively for VS Code Insiders with the pre-release version of GitHub Copilot Chat. The integration of Copilot Edits with code and notebook editors has been polished, eliminating the need for scrolling while changes are being applied, and the viewport stays in place, making it easier to focus on changes.

In another significant update, a collapsed mode has been added for Next Edit Suggestions (NES), a capability in which Copilot predicts the next edit. This feature enables developers to work more efficiently, as they can now focus on the suggested edits without distractions. Additionally, the code base search in Copilot has been advanced, allowing developers to find relevant code in a workspace for a chat prompt by adding #codebase to their query.

The new release also introduces a Copilot vision capability in preview, enabling developers to attach images and interact with them in chat prompts. This feature has the potential to revolutionize the debugging process, as developers can now attach screenshots of errors and ask Copilot to help resolve the issue.

Microsoft has also made significant UX improvements to the experimental agent mode for Copilot Edits in VS Code Insiders, which was introduced last month. The agent mode enables Copilot to automatically search a developer's workspace for relevant context, edit files, check for errors, and run terminal commands. With the UX enhancements, terminal commands are now shown inline, making it easier for users to track which commands were run, and users can edit the suggested terminal command in the chat response before running it.

Beyond the Copilot updates, Visual Studio Code 1.98 includes several other notable features. Terminal IntelliSense, in preview, improves terminal shell completions across bash, zsh, fish, and PowerShell by adding completion specs, refining command-line parsing, and enhancing folder and file completions. The peek view now supports drag-and-drop, allowing entries to be dragged from their tree and opened in separate editors. Furthermore, the custom title bar is now enabled by default on Linux, and an experimental commit hook feature prompts users if there are any unresolved diagnostics for changed files.

In conclusion, Visual Studio Code 1.98 marks a significant milestone in the evolution of Microsoft's code editor, with the enhanced GitHub Copilot AI capabilities poised to transform the development experience. As the technology continues to advance, it will be interesting to see how developers leverage these features to improve their productivity and workflow.