iPhone OS 3.0 finally brings cut/copy/paste to the iPhone and Touch, a feature many had been asking for. Another feature that everyone had been asking for - and you ask yourself, why wasn't it in there in the first place - is the landscape keyboard. When you rotate your device, the on-screen keyboard will flip accordingly.
Moving on to features that are actually cool, it also brings Spotlight to the iPhone and Touch, making it possible to quickly find stuff on your device. Another very cool addition is Find my iPhone, which uses MobileMe to find your phone on a map in case you lost it - it also comes with remote wipe in case you won't be able to retrieve it. I also like the shake to undo feature, which means you can shake your device to undo any action.
The operating system has also been optimised across the board, meaning better overall performance, as well as a smoother browsing experience in Safari. You can update your iPhone via iTunes for free; Touch owners will have to pay 9.95 USD.