Just upgraded my 3GS to the latest OS (IOS4) - I'm a little lucky as my business partner has an apple development licence and now the OS is finished we can get it early.
New animations are very nice as are the multi tasking, digital zoom on the camera, single inbox for all email accounts, and you can also arrange your applications into folders to reduce the number of pages you need to scroll through.
Also, I'm not sure if anyone else had this gripe - my 3GS screen was always a little "yellow", the new OS and firmware seem to have fixed this - much brighter and whiter.
This'll hold me off until next year now - I would love the new iPhone 4, but as there isn't anymore storage I'm not going to cough up extra cash - though would love that new screen. Will wait until next years update!