And of all the possible names Apple could have chosen, they chose to just stick an 'S' on the end for 'Speed' and leave it at that. From the world's coolest gadget company, that's pretty lame.
The 'S' upgrade gives you improved speed (up to twice as fast they claim), longer battery life, a 3 megapixel autofocus camera, video recording, a built-in digital compass and hands-free voice control. And, of course, you get OS3.
The greater speed will come through a faster processor, more system memory and possibly snappier video circuitry. Also there'll be proper 7.2 Mb per second HSDPA.
For enterprise users, there'll be hardware encryption and a few other goodies in the OS to help silence those firms that really believe the Blackberry is a better enterprise tool.
It still looks pretty much like the old iPhone 3G though, and that name...well, it's not very exciting, is it?
All in all, iPhone OS3 is a big upgrade, but the step from 3G to 3GS is smaller. It's dramatic enough to make me want one though, and I hope my provider in Oz, Optus, makes hardware upgrades easy and cheap.