Folders: Now you can organize groups of apps into folders rather than having them all on a page of apps on your phone. Putting all your social networking apps into one folder for instance, can make gaining access to all of them much easier to do.
iBooks: iBooks has been a pretty big hit on the iPad, and now it is available for use by iPhone users as well. iBooks allows users to purchase books, and can keep track of where you might be in a current selection on both your iPad and iPhone at the same time.
Bluetooth Keyboard Support: Typing a long document, while possible before on the iPhone was a bit of a chore. Now with iOS 4 users can pair a Bluetooth keyboard with their phone and type longer documents in a snap.
Tap to Focus Video: Whereas before you could only focus still pictures on the iPhone, now you can focus video as well. The new software gives your camera a 5x digital zoom as well, allowing you to get slightly tighter shots with the built-in camera.
Did any of you update today to iOS 4? What are your thoughts?