built-in GPS (A-GPS)
support for 3G networks
additional language support
enhanced email handling
MobileMe for managing your email, calendar, contacts etc...
3.5 inch display
8GB or 16GB flash drive
WiFi adn Bluetooth
2 megapixel camera with photo geotagging (not sure what that means or how it will work)
and much more.
Some notes from Job's speech... Thinner at the edges, full plastic back, solid metal buttons, 3.5 inch display, camera, flucsh headphone jacks (applaus) improved audio (dramatically). Jobs noted in a demo that the device will open a large attachement in seconds, comparable to Wi-Fi speeds! 5Hours of talk time on the battery, 5-6 hrs of browsing, 7 hrs or video watch time, 24 hrs of audio (clap!)... great performance and great battery life. New.. GPS (huge applause)... location services is going to be a big deal.. it's going to explode. Locastion data from cell towers, WiFi, and from GPS.
Sounds cool but teh real selling point of this bad boy will be the $199 price tag (with 2 year contract) and for $100 more you get 16 GB and it comes in white too! - I'm not sure if the device will be handled by more carriers yet (like perhaps T-Mobile, but I doubt it) See http://www.apple.com/iphone/