According to the Expression team at the Microsoft newsgroups it just seems that the missing functionality in Design is simply gone due to lack of time.
Currently I have noticed that the Live Effects are not present in this CTP, but they are documented in the help files. Pixel layers seems to be completely gone and no reference in the help file - so I doubt they will be back :-(
Expression Design will also not be able as a single product and only available in the Expression Studio bundle - this is really awkward I think. It seems like Microsoft are making Expression Design as a vector graphics editor for Expression Blend - not the Adobe Photoshop contender as I hoped when it was still called Acrylic!