Below images are shot with the iPhone 4 in HDR (high dynamic range) mode. Apple introduced this feature in its iOS 4.1 update. Most mobile phone and point & shoot cameras are crippled by a limited dynamic range, resulting in burned out highlights and dead black shadows. Highlight & shadow detail is far more important than megapixel count or colour correctness. My guess is that the HDR mode creates 3 f-stops of extra dynamic range. Particular in the harsh Australian light this bit of extra makes a noticeable difference.

Images taken with iPhone 4 in HDR modeClick image to enlarge