Microsoft just removed major "friction" from VS Code in its latest weekly update

The 1.121 release introduces native features that will change how you preview files and manage remote AI agent sessions.

Microsoft has just released its latest version of Visual Studio Code, version 1.121. In this latest weekly release, Microsoft decided to focus on remote agents, model configurability, Mermaid diagram previews, HTML file previews, and terminal tool optimizations.

In this update, Microsoft has included the remote agents preview in the Agents window. This experimental support allows you to run agent sessions on a remote machine that you own and can connect to via SSH or dev tunnels.

Now, let us move on to model configurability. VS Code now uses utility models in the background for chat-related tasks such as generating titles, summaries, commit messages, rename suggestions, prompt categorization, and intent detection. While this feature uses utility models provided by GitHub Copilot by default, you can use your own available models, including Bring Your Own Key models.

If you use Mermaid diagrams, this update will be important to you as Matt Bierner’s Markdown Preview Mermaid Support extension has been merged directly into VS Code as a new built-in extension called Mermaid Markdown Features. With this, VS Code can now render Mermaid diagrams in the built-in Markdown preview, to Markdown cells in notebooks, and to chats.

Another new feature in this update lets you see previews of HTML files without installing an extension. Before this update, you needed to install an extension, which Microsoft thought was "unnecessary friction." Now, users can select the Preview icon in the editor title bar when an HTML file is active.

Finally, Microsoft has made terminal tool optimizations so that they consume fewer resources and tokens with more output compression and background terminal cleanup. If you want to learn more about this update, you can check the release notes.

Let us know in the comments how you're finding these weekly updates, do you like getting so much new stuff at such rapid intervals or do you find it annoying to be constantly updating VS Code whenever you want to use it?