OS 4 for iPhone will let users touch a word that is misspelt and then replace it with a suggested one. An incorrect word is underlined in red (a feature which exists in Mac OS X) and the correct suggested words are in blue. You simply tap the one you want to use and it replaces the word with one touch of the button.
These features are currently available only on iPhone OS 3.2 for iPad. iPhone OS 4.0 is expected to be released this summer.
Earlier this week we reported iPhone OS 4 beta 3 added software support for ‘orientation lock‘ and various references which suggest iPhone 4G will support HD video recording. You can follow our iPhone OS 4 coverage here.