Larger battery
Flash on rear camera
faster processor (Apple/Samsung/Intrinsity A4)
Improved rear camera with larger lens
720p video recording
Improved screen with much higher resolution (960 x 640px, IPS panel - highest pixel density of any phone)
24% thinner than the previous generation iPhone (9.33mm)
Cons
video calls are iPhone4-to-iPhone4 and WiFi-only
still tied to Apple's restrictive app store and its wacky policies
left-handed users may experience signal issues (flawed antenna design)
not a true multitasking environment
doesn't do Adobe Flash (Google shows it can be done nicely on Android)
still only available on AT&T
now uses a micro-SIM instead of the standard SIM card for the previous generation devices
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