What's new
Front-facing video chat camera
Improved regular back-camera (the lens is quite noticeably larger than the iPhone 3GS)
Camera flash
Micro-SIM instead of standard SIM (like the iPad)
Improved display. It's unclear if it's the 960x640 display thrown around beforeit certainly looks like it, with the "Connect to iTunes" screen displaying much higher resolution than on a 3GS.
What looks to be a secondary mic for noise cancellation, at the top, next to the headphone jack
Split buttons for volume
Power, mute, and volume buttons are all metallic
What's changed
The back is entirely flat, made of either glass (more likely) or ceramic or shiny plastic in order for the cell signal to poke through. Tapping on the back makes a more hollow and higher pitched sound compared to tapping on the glass on the front/screen, but that could just be the orientation of components inside making for a different sound
An aluminum border going completely around the outside
Slightly smaller screen than the 3GS (but seemingly higher resolution)
Everything is more squared off
3 grams heavier
16% Larger battery
Internals components are shrunken, miniaturized and reduced to make room for the larger battery
This Is Apple's Next iPhone - Iphone 4 - Gizmodo