Safari's existing Downloads window, which lists every document, disk image or other file you've downloaded through the browser, is still there can be displayed using the Windows/Downloads menu option.
However, after your first download in the new version, a new icon appears to the right of the URL and Search fields in the Safari toolbar. Clicking the button reveals a list of previous downloads and the current progress of each active download, which are displayed in an iPad-like popup menu.
The icon itself presents a progress bar that fills in as downloads complete. As with the conventional Downloads window, the integrated new popup control provides links to file or disk image downloads that have completed, including a "find" icon that reveals the item in the Finder.
Popup menus were added to iOS to support an efficient way to present a variety of options or controls which might appear in a desktop application's floating palette windows.
On the iPad, this makes options easy to select via touch gestures, and easy to open and dismiss palettes of selections, without requiring a complex multi-windowing environment more suited to a mouse-based interface.
In Mac OS X Lion, the same types of popup menus are being used to similarly simplify the interface while still making the presentation of a variety of options possible. Apple previously adopted popup menu panels in iCal, which tie event settings and details directly to the event's scheduled time in the calendar.