

The biggest feature is the background app support. Now VoIP apps and music apps like Pandora can continue to play in the background. However, iOS 4 isn't true multitasking. Some apps such as IM or news apps will be paused in the background and will be forced to use push notifications for updates. This is part of Apple's mission to have maximized performance by preventing apps from sucking the battery dry in the background. Personally, I'd rather have the choice whether to run something in the background, but our Apple overlords apparently know best.
They also got rid of the ability to customize the double tapping the Home button twice. You'll always get the new orientation lock feature. Bah! And what's with Categories limited to just 12 apps? I have like 40 games installed. What, do I have to create Game1, Game2, and Game 3 folders?
Still debating whether to upgrade from 3.12 (jailbroken) to iOS 4 since I'll lose some functionality better served by jailbreaking & Cydia apps, but some of the new features are very tempting. So torn.

Read on!