At last, iPhone firmware 1.1.3 has been released.
Among the new features:
Google Maps "Locate Me" feature (as well as the cool hybrid feature)
Re-arranging of iPhone home page (including dock)
Can drag and drop applications onto the home page
Webclips (essentially MobileSafari bookmarks on the home page)
Multiple SMS messaging
(Note: if you own a iPodTouch, you need to purchase the software update for $20).
However, there have been some bumps with the latest release. Among the issues is a problem with GMail. Essentially, the GMail protocol on the iPhone has been changed from POP to IMAP, causing a sync of GMail folders (which can be good or bad, depending on how you have your main GMail account set up). To work around this behavior, you can manually configure POP or manually configure IMAP.
As for me, despite the cool Google Maps features, I still can't quite part with my free 3rd party apps, so I'll be waiting for the jailbreak for this firmware, which is not yet available, but there is this status page up to track when one becomes available.
As a (unannounced) side note, with iTunes 7.6, you can finally manually manage music and videos on your iPhone -- hallelujah! 
(still no official iPhone disk mode, but getting closer ).
Update (4/17/08): It looks like IMAP support has been pulled from GMail (not sure yet if this is temporary or permanent).
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