This has been one of the most requested features for quite a while, and in iPhone 3.0, it's finally a reality. Push notifications allow iPhone applications to provide a faux backgrounding service. In our testing, Apple's notification service works so well that you would almost think the application was running in the background.
When you download and install an application that features notifications, you get a new Settings menu called "Notifications." In this panel, you will be able to select, per application, how you would like to receive notifications. You can choose any variety of sounds, alerts or badges. Sounds will be a predefined sound from the application that will sound only if you have the ringer on; alerts will give you a pop-up alert that will either appear on the lock screen or in any application you might be in at the time; badges will give you a counter on the application icon on the home screen.