My colleague, Mitch Wagner, did a fine job reviewing all the new features of the iPhone operating system 3.0 (including cut-and-paste, Spotlight Search, voice memos, and remote wipe), so this review will focus instead on those refinements that are particular only to the iPhone 3GS hardware itself. First up, all the new goodies.
Camera And Video Capture
The most significant improvement of the iPhone 3GS over previous models is the camera. Apple has updated the 2-megapixel fixed-focus camera to a 3-megapixel camera with autofocus. The new camera takes better pictures all around. They are sharper, show more details, have less grain (noise), and are better exposed.
Pictures still are not perfect, but the iPhone 3GS does a great job for a phone. It will replace that point-and-shoot camera you may carry on vacation, but won't replace a dSLR used for serious photography. It still lacks a number of features, such as white balance control and exposure control, and doesn't offer advanced features such as bracketing and panoramic shooting.
The new touch-to-focus function is fun to use. If you want the iPhone to focus on a specific object in the viewfinder, simply touch that part of the screen and that's where it will focus. It works quickly, shoots pictures fast, and returns to the image-capture screen in an instant. The result is sharper images. Apple says it improved the low-light performance of the iPhone's camera as well. Based on images I captured in low-light situations, they are indeed improved. Apple did this without the use of a flash and instead by improving the camera module's sensitivity.

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The camera on the 3GS can replace a point-and-shoot camera, but not an SLR.(click for image gallery)
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