The Touch Diamond makes use of GPU accelerated procedural graphics, so you will not see a backward-compatible TouchFlow 3D update for the current Touch. It's capable of doing 7-8mil polygons per second (not that many games or apps will make use of that right now).
HTC has made hiding WinMo away something of a priority; CMO John Wang stated, "You wouldn't even know this device was Windows Mobile. You would just think it's TouchFlow 3D."
HTC totally reworked the WinMo virtual keyboard (as you can see above). Definitely not the best laid out we've seen (okay, it looks kind of messy), but it's instantly lightyears ahead of what WinMo had before.
Opera "reflows" web formatting, which HTC is pitching hard. Basically it just reformats and wraps text on zoom -- unlike, say, the iPhone.
Unfortunately, the device still uses a resistive touchscreen, while the controls below are capacitive. That really ought to be flipped around.
And of course, we had to ask about Android: the first device is (still) coming later this year, but it will not br in the form of the Diamond.