Let's be frank, for most people there's nothing earth-shattering in this update. None of the major flaws of the phone are addressed. So there's still no multitasking for 3rd party apps, no cut and paste, no decent folder organisation for all your applications, the diary functionality is still pretty poor and the email app still won't open mime attachments. But all of that was to be expected. That said, I am immediately struck by a few improvements that really do make life easier.
The first is the new feature where clicking the home button on any home screen takes you back to the first home screen. This may not seem like much, but I find it a major time saver that also lets me get back to my primary applications without having to look at the screen, a major failing of touchscreen devices as a whole.
Other neat additions include some major changes to the App Store which make it much more usable and in-line with the iTunes version. For example, whereas you could previously only see one screen shot of an app, you can now view and zoom in on all of them. The categories screen now has icons which make navigation easier, and you can break down your view by "Top Free", "Top Paid" and "Release Date" like you can on iTunes. The Updates screen now has an "Update All" button which fixes a major annoyance and time waster. All in all the App Store is a much nicer place to be now.
The mail app has several claimed improvements. The only one I've noticed so far is that wide HTML emails now seem to wrap to the screen better. The claim that "isolated issues with scheduled fetching of email" have been fixed remains to be tested. Since the update my iPhone still does that random thing where it downloads heaps of old email, and forgets the most recent ones. A very annoying bug and I think it hasn't been fixed. Anyone else experiencing this?
There are also claimed improvements to the stability of Safari, and if that's true then they're much needed. I also haven't had a chance to test the new features in Google Maps. Further reports as I play more.