Every year, at around this time, the whole tech world will be affected by the frenzied hyping of one device - the iPhone.
S stands for sucks speed. The 3G S features a faster processor (600Mhz) which should bring a much needed speed boost to the UI & apps. Games should also benefit from this along with the new 3D chip.
The 3G radios also got a speed bump with support for 7.2Mbps HSDPA.
Video recording - a much-demanded feature which has been finally implemented after a 2-year wait. The iPhone 3G S can record at VGA (640x480) at 30fps. Also included is quick trimming of videos.
3MP camera with auto-focus - A better camera with basic exposure, white balance, auto-focus, manual focus by tapping on screen & auto-macro.
Voice control - exactly like the voice control on Windows Mobile, it allows you to control apps like iTunes.
The magnetometer (digital compass), which will help in turn-by-turn navigation on Google maps.
Fingerprint-resistant oleophobic coating - having had hands-on experience of the iPhone's love for fingerprints, I can say this is a really great improvement.
The iPhone 3G hasn’t been phased out – Apple will be selling the 8GB version at a lower price while the iPhone 3G S will only be available with 16GB & 32GB capacity.
Another improvement - the iPhone 3G S will have better battery life.
What's missing? 
Most predictions were wrong. There was to be no front-facing camera with video iChat (or video call) nor a new design with matte black finish (that would have been much better than the glossy black). & neither a back-lighted Apple logo. It’s the exactly the same design as the iPhone 3G.
No flash
The 3MP camera is good for casual photos but with the lack of flash, it’s crippled. A dual-led flash could have doubled up as lighting when recording video.
& Apple still haven’t added support for the other Flash on Safari.
MicroSD
Almost all smartphones have a MicroSD slot… why not the iPhone?
Bluetooth 3.0
If Apple really wanted to showcase the iPhone 3G S's speed, they should have included the much faster 3.0 spec - & possibaly becoming the first device to do so. With just Bluetooth 2.1+EDR, that's disappointing. Unless they add it via an update…
Multi-tasking
The iPhone OS 3.0 added MMS, Copy & Paste, landscape keyboard & Push Notifications. However Push Notifications is no equivalent to running multiple apps & you can’t switch between them. With no multi-tasking, the iPhone OS sucks – imagine using any OS without app switching!
The main reason I think Apple cannot add multi-tasking & other features is because of battery life. Comparatively, the N97 with its 1500mAh battery has 6h 3G talk time.
One possible solution is adding an AMOLED screen – better quality, less power but more expensive.
But fact is… lithium-ion battery technology seems to have reached its critical point. To really improve on battery life, Apple will need to optimize the OS, which it has so far procrastinated by adding faster processors. What they did with Snow Leopard, they should do the same thing with the iPhone.
Mauritius? 
The iPhone 3G S will be available on the 9th of August in Mauritius… but given that oranges are oranges, I don’t expect the same price drop in the US as with the iPhone 3G. Currently the 8GB iPhone 3G is Rs 24k & the 16GB is Rs 32k.
The iPhone 3G S 32GB may be around Rs 35k.
3G users have no obligation to upgrade since they’ll be getting most of the features on the 3.0 OS, but for iPhone gen1 users, it’s a tough decision. Sure the hardware is better, but at that price?
iPhone v4?
The iPhone 3G S is no new product, it’s just a better iPhone 3G (a bit like what Nokia did with i versions of their phones, like N93 –> N93i). Evolutionary, not revolutionary.
Since some time Apple have been playing catch-up with other phone manufacturers by adding standard features every year… I was expecting iPhone v3 to be the version where it’ll finally level the playing field, but it’s not - no front-camera, flash or multi-tasking. Yesterday’s keynote was disappointing – it never stirred the buzz like with the iPhone 3G. If Apple don’t get it right next year, the iPhone is doomed. Steve Jobs should already start thinking of the next thing.
PS. Snow Leopard was also announced. Basically Snow Leopard is to Leopard what Windows 7 is to Vista. & cheaper Macbook Pros (courtesy of Laptop Hunters).
Update: 
Orange are clearing up their stock of iPhone 3G (to make place for the 3G S), offering a 20% rebate.
iPhone 3G 8GB is now Rs 19k & iPhone 3G 16GB is Rs 24k. They’ve also included instructions on how to update current iPhone to OS 3.0. ;)
Update 2:
The iPhone 3G S is now available at a prepay price of Rs 34,000 & a post-pay price of Rs 33,000. :)