The iPhone 3G S (S stands for Speed, by the way) will indeed be speedy and considerably faster then the current iPhone (3G). The latest iPhone will sport a 600 MHz processor and 256MB of RAM. When compared to the iPhone 3G which has a 412MHz processor and 128MB of RAM it is definitely a notable speed increase. For those wondering, the second generation iPod Touch has a 532MHz processor. The faster processor and additional RAM in the iPhone 3G S will be welcome by app store developers without a doubt. I certainly expect to see more games coming to the iPhone 3G S – it may very well be the “funnest iPhone ever”.
The iPhone 3G S also has more pipelines, larger L1 cache, and even has an L2 cache of 256KB (the iPhone 3G does not have an L2 cache). Additionally, the new iPhone is using a PowerVR SGX graphics processing unit which provides support for OpenGL ES 2.0. The latest iPhone hardware is on par with that of the Palm Pre. In fact, they are essentially running the same hardware (at least for CPU/GPU).
I fully expect the new iPhone to perform as Apple claims (up to 2x faster) in typical usage. Nonetheless, this is seriously a beast of a phone mobile device.