Each iPhone model has had more RAM than its predecessor. The original had 128MB, the 3GS has 256MB and the iPhone 4 has 512MB.
The iPhone 4 also has Apple’s A4 processor, just like the iPad. Think of how responsive the iPad is with the A4 and 256MB RAM, and you realize two things.
First, iPhone 4 will be very fast. More importantly, it confirms that Apple’s patience is its greatest asset. With this much RAM and the A4, the iPhone is finally ready for often-requested features like 3rd party multitasking, a high resolution display and video calling. Those features would have been dismal on less powerful models, marring the experience for millions and damaging the iPhone’s reputation.
Expect this trend to continue. Apple will introduce technologies later than competitors, but the execution will be much, much better.