The way I see it, part I of the boards, being multiple choice format, is geared to test primarily medical knowledge (recognizing symptoms, complications of treatment, etc). If your knowledge is not sufficient, then you dont get to move on to part II.
Part II, the orals, I think is being redesigned to test the other components of being a competent physician i.e. the other core competencies as outlined by the ABMS/ACGME: patient care, communication, professionalism, practice-based learning, system-based practice. Recent takers tell me the cases are more standardized, where in the past the oral examiners could ask you about pretty much anything they wanted. (Flashback - I had one guy break out a slide carousel and showed a variety of x-rays, photos of prostheses, physical signs - and basically asked me, "what's this...what's this... what's this...")
Whether the boards do an adequate job is assessing these competencies is another issue. Clinical relevance seems is a recurrent theme in the criticism of the boards. Part of the problem I think is the breadth of our field (I agree with axm on this one). If you get a question writer whos subspecialty is - say cardiopulmonary rehab, or cancer rehab, or peds neuromuscular disorders - what may be clinically relevant for him/her may be considered esoterica for the rest of us. And as axm alluded to, cant test on recent, controversial stuff where the evidence base is shaky. So the majority of questions become recall type questions, cause they're easy to write and fact check.
What I've noticed - is that nowhere is there a place to assess competency on procedures. The EMG boards did to a limited extent. Can't speak about the pain boards. But the rehab boards - not that I recall.