Lets face it, 3.x is behind the times already. Apple needs these features to catch back up:
-Multitasking: Not some half-assed Apple approach where the state of the application is saved like MS is doing with WM7, but true multitasking.
-Openness: I should be able to download an application outside of iTunes, after a warning dialog that tells me about the risk.
-The "sandbox" should be opened up a little. Applications should be allowed to launch on boot and run in the background. One of my favorite applications on Android is Mobile Defense. Its better than .ME at phone tracking and free (.ME is crap, it should be a free service). Applications should be allowed access to other applications and to the phone's core services like SMS. I'd love to be able to download an application that hides incoming SMS from specific contacts for example, or an app that forwards the day's SMS conversations to an email box at 2am.
-The notification system just doesn't exist on the iPhone. I'd say it needs an overhaul but I don't even believe it exists so they need to build one. An intrusive popup is not a notification system.
All the stuff that Android 2.1 does, right now, on better hardware than the iPhone in several cases, huh?