I was surprised to see that Twitter for iPhone doesn't use OAuth, meaning that we'll be seeing another version before the end of June. (Note: they may be using xAuth instead, which would not necessitate an update.) The "Services" menu still shows support for Favrd, which has been gone for months, but it also includes several other useful services like Tweet Blocker, Follow Cost, Favstar.fm, Overlapr, and Tweeteorites.
A few noticeable changes in your timeline include inline retweets and location information (where available). If you are not logged in you can see trending topics (although why you would want to see trending topics is another question entirely) and search. There is also support for "Top Tweets" and "Suggested Users," two more features of little practical value.
Read on for more features and tips.