That's not software though. iPhone could really use another 192MB of ram though!Real virtual memory
More memory
Faster CPU
The above will go a LONG way. App development is hindered by these current limitations. Try running any app in simulator and you'll see what I mean.
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Software wise anybody knows if 3.0 is any faster than 2.2?? Did they take the snow leopard road, trying to optimize the OS or they just added new features and we will have to wait for 3.1,3.2 etc. for some of the lag to disappear. I really hope it's faster than 2.2.