A few of the most notable updates are Newsstand, iMessage, Notification Center, Wi-Fi Sync, Twitter and iCloud.
Newsstand updates the iBooks app to include magazine and newspaper subscriptions.
iMessage, similar to Google Talk will allow users with iOS devices to send unlimited instant messages without the need for a texting plan.
The Notification Center, similar to rival Android, will let you swipe down from the top of the screen to see all of your notifications.
For Twitter, iOS has added its own integrated client so you don't have to download third-party app if you don't want.
By far the most important update is the addition of iCloud. iCloud integration gives all users 5GB of free cloud storage to backup your files.
Update pics via ZDnet: