My understanding is that 855 is designed with a steel penetrator and is intended to be a multi-functional combat round. Out of a full-sized M16, it will yaw and possibly fragment on impact with a soft target, causing multiple wound channels while the penetrator provides additional, well, penetration.
It has been criticized for inconsistent performance on soft targets, particularly at ranges beyond 200m out of the M16. Of course, the military brought even more of this problem on itself by adopting the M4 carbine, which reportedly has starts to have fragmentation issues at distances beyond even 50m thanks to the reduced muzzle velocity from the 14.5" barrel.
The M855A1 is a new version, which I haven't seen available to consumers yet, that is a solid copper bullet with a separate (that is, it's not covered by the jacket) steel penetrator of larger size. The claim is that it penetrates better than 7.62x51 ball, fragments more reliably (especially out of M4 carbines), has a higher muzzle velocity, and is pretty much better in every way. I heard that it will also do dishes, but haven't seen any graphs on that yet.
The issue here, of course, is that the military must have a single type of ammo that does everything. As you might have noticed when reading about traditional types of ammo, that's usually not how it works - you have ammo that does well in soft targets, and ammo that penetrates really well, not both. The fact that they've got ammo that works as well as it does at both roles is really pretty great, even with the performance complaints that M855 has suffered under. It's my belief that if they hadn't switched to M4s, they wouldn't have to change ammo, but hey, that's just an opinion. I just think that poodleshooters should have long barrels and fast ammo.