Unless you live under a rock, you probably have been inundated with news of the upcoming iPhone 3GS.

As an iPhone developer, I wanted to add to the din with some points on the pricing controversy, and unique features of the iPhone 3GS.

Pricing

There has been a lot of screaming about iPhone 3GS pricing for existing iPhone 3G owners. I actually saw a story on it on CNN’s Situation Room yesterday(!) Depending on how early you got the iPhone 3G, you may or may not be eligible to extend your contract and get an upgrade discount from AT&T.

The best way to find out is to go walk through the process of replacing your iPhone 3G with an iPhone 3GS on the Apple website. I’ve been through the complete process from start to finish, and can assure you that you can check the specific pricing offer for your account without committing to anything first.

New AT&T Customers can buy the new iPhone 3GS for $199/$299 (16GB/32GB).

AT&T Customers who are far enough into their contract for early upgrade pricing pay $399/$499.

Both of those pricing tiers assume a 2-year contract (or extension).

If you are an AT&T customer who is not eligible for early upgrade pricing, or simply do not want to enter into a contract with AT&T, the price is $599/$699.

The reason for this is obvious – its a $599/$699 mobile phone – anyone paying less is financing the cost with a 2-year contract. Its been like this since the beginning of time, people, its not a phenomenon that’s specific to the iPhone or AT&T.

Features

Now lets get to the good stuff. For some people, news from WWDC may have been somewhat confusing as they introduced both iPhone OS 3.0 and iPhone 3GS in the same keynote.

Its important when evaluating whether to buy the iPhone 3GS as to which features are unique to the iPhone 3GS, and which are features of iPhone OS 3.0, which will run on the older iPhone 3G.

For example, iPhone OS 3.0 has features such as Spotlight search and cut-and-paste, which will work just fine on your iPhone 3G. You don’t need to buy an iPhone 3Gs for these features.

So, what does the iPhone 3GS bring that is unavailable on the iPhone 3G?

Let’s take a look:

1. Much Better Camera.

Let’s face it, the iPhone camera is decent for a phone, but its not competing with most of the cameras in newer phones like the Pre. The new 3.0 megapixel (2048 x 1536) autofocus camera in the iPhone 3GS seems set to change that. Not only is it higher res and lower light, but you can also selectively focus on different subjects in the picture with a touch of your finger.

Some have griped that the camera should be at least 5MP, but 3MP is an image larger than all but a 30″ monitor, so I think its a good choice. Any bigger, and you are going to get a save lag which is more annoying.

2. Video recording. Again, the iPhone gets up to speed with its peers and then some. Previously, hackers had managed to get the iPhone to record acceptable 15 fps video through jailbreaked apps. The new iPhone 3G will blow this away, as it has full VGA (640×480) resolution at 30 fps. Not only that, but it can upload that video to sites such as YouTube as soon as you finish recording, which is great.

3. Faster processor, better battery life.

Now here’s a magic trick that is sure to please every iPhone user – the new iPhone is not only 2x faster than the iPhone 3G, but it has significantly better battery life as well. The one downside is that 3G standby and talk time are the same – but playing games, video, audio, and using 2G/Wifi internet can all be used much longer – in many cases hours longer – which is fantastic.

4. Voice control.

Here is another one the iPhone 3G crowd is getting a bit in a fuss about. The new iPhone 3GS has a new Voice Control system which can not only voice dial, but can also control stuff like music playback as well. Its pretty slick. Now, most people seem to think that there is no reason the iPhone 3G could not do this with the same hardware, but Apple seems to be inferring that the upgraded hardware on the 3G is necessary.

5. Digital Compass

At first I thought ‘why the hell does a GPS phone need a digital compass?’ As an app, I would agree that the digital compass is not very appealing to the average user. However, as an augment to GPS navigation applications, its great! When looking at a Google map, it can now orient the map in the direction you are facing, which alone qualifies its value.

I also look forward to having it on hand when exiting an unfamiliar subway in Manhattan – sometimes its a bitch to figure out which way ‘downtown’ is.

Whether you decide to go with the iPhone 3GS or not is a tough decision that each user needs to make individually based on their needs and individual pricing options.