The two best things Apple can do for the iPhone OS at this point: 
- Allow applications to be aware of an on-board file repository (i.e. allow apps to access the same file on the same device at different times)
 
- Add multi-tasking (like allowing audio apps OTHER than itunes to play music in the 'background' while using Safari.) 
 
The third... 
- thing is allowing Safari to render static Flash apps, or Apple should AT LEAST provide a viable in-browser alternative for developers.
 
...and a fanatical devotion to the Pope.