The new iPhone will be an amazing 7 times faster than its predecessor released just 14 weeks ago thanks to the new A5 system on a chip including two ARM CPU's and a dual core GPU.

The most notable innovation of the 4S is its intelligent assistant, Siri, that takes commands like "Call Jim before I leave the office" that uses your location to do so and "where's great Greek food in Phoenix?". This service is only on the 4S.

Bloomberg

Today's announcement also coincides with the announcement of iOS5 which will be available for iPhone 4, iPhone 3GS, iPad, iPad 2, and 3rd and 4th generation iPod Touch.
Ars Technica