The iPhone can be seen as a culmination point for much of what Steve Jobs has set his mind, hand, and brain trust to in the past decade.
It is important to strike a distinction between iPhone 3G, the US$199 handset (US$299 with a memory upgrade from 8GB to 16) that will ship on July 11, and iPhone 2.0. The latter, while less celebrated, is the more significant. iPhone 2.0 is the firmware, operating system, drivers, and applications that run iPhone, iPhone 3G, and iPod touch. All users of these devices will be able to download iPhone 2.0, and once installed, the new software will bring all devices into functional parity, except for the 3G high speed data and GPS autolocation enabled by hardware unique to iPhone 3G. Moreover, iPhone 3G will function as the original iPhone does in areas that high speed data services can't reach, which is most of the world.
Apple has given the device a bit of needed attention. It has undergone a very slight exterior redesign. The back of the handset is now either black or white (I'm not sure of the material) rather than the bare brushed aluminum that takes scratches so easily. I don't know if the new case relaxes the rigid design that makes the current iPhone so fragile. iPhone's bizarre recessed headphone jack is one of those green-lighted ideas that looked better on paper. Thankfully, it's been scrapped, decimating the market for US$15 iPhone headphone cables.
Apple claims that with a single charge, iPhone will give users 300 hours in standby, 10 hours of 2G talk time, five hours talk time on a 3G network, five hours of browsing, seven hours of video playback or 24 hours of audio playback. Not having cracked the case of a new iPhone, I can only guess how Apple achieved this.