its just hardware, the 3g comes with 2.0 firmware, which is software, and the old iphone can update to that
No, its more than just the software. It also has GPS now, i heard it has a better camera, but i cant confirm that. It has microsoft exchange, scientific calculator, push calendar that works with exchange, and i think a few other small things. Oh, and its supposed to be a bit slimmer. Anyway im excited and im gettin one. I think its worth it.