Really short version: it's awesome.
The 3GS was my first iPhone... so I was bit late to the game in a way. I had owned a first generation iPod Touch a while back and fell in love with the apps (once the App Store opened). I knew I had to be able to get more use out of it on more than just wifi. So as soon as my Helio contract was up in 2009 (ya, I had Helio, an Ocean actually - it was cool for like a month - then the iPhone came out), I upgraded immediately.
I loved the 3GS. It took all of my favorite things about the Touch and made them better. And at the same time it gave me so much more utility than the Touch since I could use it on a cellular network now. A while back when supposed pictures of the newest iPhone leaked (even before the whole Gray Powell thing) I knew I wanted it. The design sold me immediately. I suppose you could say I like the industrial look. One thing I also realized is that there's not a single Droid device that I really like cosmetically. They're ... OK, but nothing really draws me to them. The iPhone 4 is different.
Getting beyond the aesthetics for a minute, my absolute biggest gripe with the 3GS was its camera. A lot of other people said it was fine, but I guess my expectations were a bit high. I didn't care for it at all. Rarely used it actually - only when I just wanted to get a quick snap of something and didn't care about the quality. The iPhone 4 already beats the 3GS in the camera department by leaps and bounds. I really don't care how many megapixels are in a camera - I just want nice, clear pictures. It could have 20 MP for all I care, but if the pictures turn out like crap, who cares how big they are? So far so good with the 4. Note: I have not yet tried video recording (need something to record first... haha).
The screen. This "retina display." A lot has already been said about the screen. I don't need to add much more other than it is incredible. I mean, really... you need to see it for yourself. Even the random comparison shots online don't do it justice. I've never seen anything like it on a mobile device of any kind... Oh and the supposed yellowness on some iPhone 4 screens? Apparently just some adhesive that hadn't properly dried or evaporated from assembly. No worries there (mine didn't have this issue anyway).
The device itself feels like a quality piece of hardware. It is very solid feeling. Extremely thin - but not thin enough to feel fragile. I'm sure this thing could break as easily as many other devices, but the feel is there to give you some confidence in handling it. I have not much to say about the other buttons. Nothing really special about them except that now the volume is two separate buttons - but they feel nice and solid as well - an improvement.
iOS 4... Not much to say here yet. I'd really like to see more apps able to take advantage of the fast app switching. But until that happens there's nothing really mind-blowing about the new OS for me (aside from folders - but that is more of a relief than blowing of the mind).
Even despite the "antenna issues" people are demonstrating on video (not necessarily in real world use, mind you), I still would call this phone a win. Of course the Android fanboys will say what they will and the Apple haters (who really only hate Apple to say they hate Apple) will say what they will - but I couldn't care less at this point. This was a good investment if you ask me... if anything I'm worried that next year's model will be just as awesome and I'll have to upgrade again! Haha!