In version 1.1, the News Feed contained only status updates and mobile photo uploads. In version 2.0 you will have the exact same News Feed experience as on the Facebook website. You will be able to see your friends' Posted Items, new interests and relationships, photos, and all other stories that pass through News Feed. You'll be able to comment on every story, and filter the feed by certain categories, applications, and friend lists, just like on the new Facebook.
You'll be able to see all of your Notifications on the Home tab, and new Notifications will arrive in real-time while the app is running. We're preparing for the release of Apple's new push service, which will allow us to deliver Notifications to your iPhone even when you're not running Facebook for iPhone. I expect that to be one of the features in the next version after 2.0.
Profiles now have a tabbed design, like the new Facebook website, and a combined Wall and Mini-Feed.
Search for and Approve New Friends
This has been a popular request. You will now be able to search for people beyond your own Friends, request their friendship, and approve your own friend requests.
In version 1.1, you can only see the first 30 messages in your Inbox. In version 2.0, you will be able to see older messages, all the way back to the beginning. You'll also be able to search your Inbox and see your Sent folder.