The browser has seen some love, and it now supports double-tap to zoom, and support for various HTML5 features, including full screen support for the HTML5 video tag. It also brings database API support (for client-side databases using SQL), Application cache support (for offline applications), and geolocation API support. The browser UI has been refreshed too.
The virtual keyboard has been improved too. It has a new keyboard layout and takes advantage of multitouch to prevent missing presses while typing really fast. Android 2.0 also brings Exchange support, as well as a unified single inbox for all your accounts (as Palm's webOS does).
Another new feature is Quick Contact. With this new feature, you can tap on a contact, and it will bring up pop-up containing shortcuts to various ways you can communicate with said contact. It works from within other applications too. Support for BlueTooth 2.1 with Object Push Profile and Phone Book Access Profile has been added too.
Verizon will unveil its Droid phone tomorrow, which will carry this new Android release. It is currently unknown when other Android devices will be able to install the update.