So just to be clear, is it true that this isn't an actual new game like Armored Princess was, but just an addon to Armored Princess that adds a few new things?

Yeah my issue is that I never finished Armored Princess because while it was amazing early on, I thought it really bogged down closer to the end. As a result I'm not so interested in an expansion that just adds more stuff to do after the main quest is finished. If they ever added a completely new campaign though I'd be all over it.

Need new release now.    Need more King's Bounty.  New campaign, new mods, new campaigns.   Now.   Yeah yeah yeah yeah yeah.

An expansion is fine.   King's Bounty's biggest weakness isn't the engine--it's the replayability.   There's only one campaign.   It needs more campaigns, more mods.   More monsters, more items, more altar types, new skill sets, maybe even a new class.   And item sets need to be associated with the campaign:  the problem is, items have sets.  It's harder to achieve sets if you have too many different items out in play.   Unless you make it a quest reward or something.

The basics of the game are fine, it just needs more stuff.

Rock, Paper, Shotgun had a writeup on it if you're looking for more information.

Wot I Think – King’s Bounty: Crossworlds
http://www.rockpapershotgun.com/2010/08/31/wot-i-think-kings-bounty-crossworlds/

In many ways I liked the Legends Campaign better then the Armored Princess one. I also liked the summoning system from legends better then the dragon system from armored. I can't really remember if there was anything from Armored that I actually liked better, other then maybe the flying mount. So if your craving a new campaign that badly, picking up legends might be more reasonable then buying crossworlds.

Somehow I ended up doing much more backtacking in armored princess. In legends whatever continent you were on had pretty much it's own "ecosystem" of troops that worked well together so you ended up using orcs on the orc continent, elves on the elf continent, etc. In armored princess though you were always bouncing around between unreleated islands and the fights caused so much attrition that you had to refill after each one. This meant I often had to back track to multiple islands to refill every troop type after every fight, while in legends I could just refill at the local troop buildings. 

I do want to say that there were some game balance improvements in armored princess though. I seem to remember that there may have been some skills and spells that were rebalanced, and that a couple of skills may have gone from being awful to somewhat useful. I'm a little fuzzy on exact details though.

That was my experience in AP as well. I actually liked it when it was really difficult, even though all the back tracking was a pain. But I lost interest once I got powerful enough that it was no longer challenging. The difficulty level was much more consistant in legends.