
The new iPhone OS will be downloadable and will work fully on iPhone 3GS and 3rd Generation iPod Touches.
It will also work partially on iPhone 3G and iPod Touch 2G.
They say there are 100+ new features that iPhone OS 4 is bringing to the Smartfonery, But they only told us 7 at the Apple event on Thursday (Friday Australian.)
Heres a few of the main features that are coming to the iPhone and iPod Touch.

You will be taken to the exact spot you left off in the app.
The pity is that all us iPhone 3G and iPod Touch 2G and below users will not have this feature because the hardware isn't good enough.

Each folder can be named and can contain up to 9 apps.
Originally 11 pages of apps allows you to have 180 applications, if you were to replace each of them with folders you could have up to 2160 applications.
Which yeah, is really only useful if you have a 32-64GB device.

This eBook reader will feature the iBookstore and a free copy of Winnie the Pooh to get you started . . .

That and other features . . .
Apple also said a few others like Enterprise features for companies and iAd,
Obviously Apple saw all these companies like AdMob bennifitting from THEIR product, and they didn't like it . . . so they've made iAd, where Apple get more money, the ads are more interactive, cooler and don't yank you from your app when you click one.
So basically Apple are getting rid of Ad Supplying competition . . .

Jailbreakers have been laughing at 'stationary noobs' because of the customization, well, that and illegal downloading of apps . . . anyways.
To your left is a picture of the new homescreen, not jailbroken, this is the real deal. The dock at the bottom is different, matches the iPad more, or the dock on Mac OS X 10,
Also the wallpaper, WHICH, is customizable, you can select different wallpapers for both the homescreen and the lockscreen.
Personally I can't wait til it comes out.
Sad thing is iPod Touch users will probably have to pay $10 for the upgrade like last time . . .
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