Netgen version 1.3 is the stable branch and has been essentially unchanged for several years. The development branch version 1.4 is an attempt to bring netgen up to par with the industry-standard Calibre tool from Mentor Graphics. Since (as far as I know) all LVS tools are based on the same class partitioning algorithm, this effort is not as difficult as it may seem. Mostly, netgen must be made to properly understand hierarchy, device properties, and generate a more readable output. All these changes are now underway (as of November 2007, when the development version 1.4 branch was created).
Netgen was developed independently of magic, written by Massimo Sivilotti, and eventually incorporated into the beginnings of the Tanner L-Edit suite of tools. However, the original code was left open source, and so I have incorporated it into the Tcl-based suite of tools including magic, IRSIM, and xcircuit.