New specs revealed:

• Improved performance. Processor from 266 to 350 MHz. DRAM doubled to 64MB.
• Built-in microphone (someday, this can support Internet telephony)
• Hardware codecs H.264 and H.263
• Built-in accelerometer (think magic 8-ball, scrolling, and games)
• Removed the ambient light sensor (as not adding much value)
• Power draw down to 2.5 watts
• Changed the squeeze sensor from analog to binary - this used to be a force-sensing resistor, now its a mechanical switch which enables better tactile feedback
• Sleeker, sturdier casing. The benefit of having the electronics pop out from the soft alpha casing (easy cosmetic hack support) were outweighted by the disadvantages (seems to break constantly, since it pops out easily). So now the casing is glued shut in the mass retail product.
• Cleaner chumbilical enclosure