As expected and rumored many times before, Android 4.4 will finally increase the performance of Android on low-end devices, after it took a step backwards with Android 4.0 and later, compared to Gingerbread, which was a significantly leaner, although not as pretty, OS.
When Google moved to Android 4.0, they changed a lot of stuff, both under the hood, and especially interface-wise. It seemed like the polish and aesthetics of the OS were more important than performance back then, and for good reason, because stock Android wasn't exactly the prettiest OS around back then. Unfortunately, that came with a performance hit, which Android 4.4 is now fixing in more ways than one.
The most important improvement is related to RAM usage. They've made the system itself a lot leaner, so it will use less RAM, and they've also made changes so apps that use a lot of RAM don't steal it from the OS itself, and choke it to death. That means that if developers' apps use a lot of RAM, they might not work properly on devices with 512 MB of RAM, which will force developers to optimize them some more. Fortunately, Google is also giving them the tools to verify their apps' RAM usage, to make sure they are not too bloated.
For devices that have GPU's that support Renderscript GPU rendering, they've also significantly improved the performance there, which means the UI not just in the OS, but in all apps using Renderscript rendering, should become even smoother. On high-end devices it may be less noticeable since they already have high-end GPU's, but it could make a big difference at the low-end, where the devices needs all the extra performance they can get.
One other improvement, which should also affect battery life, and that's again something low-end devices with small batteries need, is audio performance. Google has made some changes so audio can now be off-set to the audio DSP, instead of the CPU, which should increase battery life by at least 50 percent when listening to music with the screen off. This is something a lot of buyers of low-end phones care about, so it's good to see this improvement, too.