Although it looks essentially identical to the iPhone 3G before it with the same black or white plastic case design and the same 3.5" display with 320x480 resolution at 163 ppi (albeit with a new "oleophobic" oil repellent coating) -- and still combines mobile phone, iPod, and Internet functionality -- the iPhone 3GS* has a variety of significant additions.
Perhaps most notably, the iPhone 3GS is faster -- "S" refers to its enhanced speed (600 MHz up from 412 MHz, with a dramatically improved graphics processor as well), twice the RAM (256 MB up from 128 MB) -- and adds support for faster 7.2 Mbps HSDPA (802.11g/n and Bluetooth are supported too), a 3.0 megapixel camera -- with VGA video recording at 30 FPS -- as well as autofocus, macro, and white balance support, a "tap to focus" feature, and the ability to trim the beginning and ending of videos, along with a digital compass and A-GPS.