I now have iPhoneOS 4.x. Whoop. So far, I've noticed:
Prettier icons for Mail, Safari, Calculator and Clock.
Threaded mail messages.
Albums/Faces/Events division in Photos.
Nope, that's it.
Okay, I'm not expecting much: I've got a 3G, after all, so no multitasking for me. But Photos still doesn't support Smart Albums from iPhoto, or the nesting of albums, or have a search function, or have a sensible ordering. And there's still no drag function on scrolling. (Got a lot of photo albums? Or a long web page? Or a long email message? Tough: you're gonna have to scroll through it page by page by page.)
At least it's still got the data in the phone (Calendar, Contacts), so the "error occurred during restore" diagnostic can't have been that dramatic...