A. A. Changes in functionality are typically documented in incremental steps from the previous release. The following sources are available :-
What's New section in the Books Online
Q152032 Changes to SQL Server 6.5 That Affect 6.0 Apps
Q133177 Changes to SQL Server 6.0 That May Affect 4.2x Apps
There is no particular Kb article for SQL 6.5 to SQL 7.0, so just look in the Books Online. There is also a FAQ entry called SQL7differences.txt.
There are also occasionally changes introduced in service packs. These changes are documented in the readme.txt for the servicepack, which is cumulative. So SP4's readme contains all changes from SP1, 2 and 3 as well.