there were suspicions that the iPhone 4 had a super-high-res display. Steve Jobs just introduced it; the Retina Display.
While it's in many ways a standard LCD, with 800:1 contrast ratio and millions of color possibilities, the screen leverages the same IPS (in-plane-switching) system that the iPad does to pack four times as many pixels onto it than the previous iPhones do. That gives it a 960 by 640 pixel resolution on a 3.5-inch screen. This makes it easy for existing apps to work on the new phone--they simply have to double pixels in both directions on screen, and they'll appear exactly as they do already.
But that resolution, when used by new apps, will equal a pixels per inch count of 326. As Steve Jobs noted during the presentation, the human retina has a detection limit of around 300 pixels, making the screen look incredibly smooth. Jobs even suggested the look of the screen for text approached the quality you could expect from a printed page.
