During the July 11 launch of the iPhone 3G, people stood in line for hours to buy what an incredulous security guard at the University Village...

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During the July 11 launch of the iPhone 3G, people stood in line for hours to buy what an incredulous security guard at the University Village Apple Store remarked to me was “just a phone.” But while the latest model boasts two impressive hardware features, faster 3G network data speeds and a built-in GPS receiver, the iPhone 2.0 software is the more important release.

Apple sold 1 million iPhone 3Gs worldwide during that first opening weekend, but the latest software is also available free to owners of the roughly 6 million original iPhones in circulation. Owners of the iPod touch can upgrade to version 2.0 for $9.95 (the charge results from the way Apple reports iPod income, which is different from iPhone income).

New in iPhone 2.0

An upgraded iPhone doesn’t differ much in appearance, but Apple changed a lot in the background.

For instance, the iPhone is now a better corporate citizen, which should make IT folks happy. It supports Microsoft Exchange and ActiveSync synchronization of data, as well as a host of useful-in-business functions.

Perhaps I’m easy to please, but I was thrilled that the Calendar application finally recognizes separate calendars and color-codes them for easy reference. I maintain a handful of calendars in iCal (personal, work, clients, etc.), which were all previously dumped into one calendar on the iPhone.

Contacts are now searchable, so you can start tapping a person’s name to find them in your contact list instead of scrolling endlessly to reach your friends the Zimmers.

The Mail application also finally gives you the ability to delete or move several messages in groups instead of individually. I’ve noticed file attachments are now better handled, too, making it easier to view attached photos or files that the iPhone can read, such as Microsoft Word documents.

Alas, Mail still needs improvements: You can’t perform a text search to find messages; you must still tap-tap-tap just to switch between mail accounts (an option to display all mail in one Inbox would be helpful); and there’s no spam filtering or rule creation. Apple claims that its servers filter messages for MobileMe (formerly .Mac) accounts, but I still see more than my fair share.

Third-party applications

The operating system’s underlying workings are only half the story, however. The iPhone 2.0 release opens the iPhone and iPod touch to several hundred (and growing) applications created by third-party developers.

To access them, Apple created the App Store, which appears in iTunes and on the device. Just as the iTunes Store application introduced direct music purchases last year, you can browse, buy and download software. In fact, the App Store is the only distributor of iPhone software.

Developers set their own prices (30 percent of which goes to Apple), so you’ll see prices ranging from free to as much as $449.99 (!), with most about $10. The App Store also notifies you when updated versions of programs are available for download.

The applications run the spectrum from simple tip calculators to games of all stripes. Here are a few broad categories that I think are important, with selected application examples. All of the ones mentioned here are free unless otherwise noted.

Utilities

Apple has never included a basic to-do application (despite having task features in iCal and Mail on the Mac), but now you’ll find a handful of to-do list managers; none sync to iCal or Mail, however. Similarly, there are a number of voice-recording programs that let you record audio snippets.

I’d like to think that Apple’s engineers were reading my column earlier this year when I talked about utilities for controlling my iTunes playback from the iPhone. Remote, a free application from Apple, does exactly that. It controls a Mac or PC running iTunes 7.7 (also released last week) remotely as if you were using the phone’s iPod features. You can play the music through remote speakers (if you have an AirPort Express, for example), and you can even control music and video playback on an Apple TV.

FileMagnet ($4.99) restores the iPod function of using your iPhone as a portable storage device. Paired with a Mac desktop application, you can transfer any file to the iPhone’s memory over Wi-Fi and view formats such as PDFs, Word files, images, movies, and the like.

Location aware utilities

If the iPhone has a “killer feature,” it has to be Maps, a direct pipeline to Google Maps enhanced even more by the iPhone 3G’s GPS capability (I’ve found that first-generation iPhones do a swell job of finding one’s location by combining location information from cell towers and Skyhook Wireless).

Now, more applications are taking note (with your permission) of where you are. Urbanspoon helps you locate restaurants in your neighborhood; NowLocal grabs items from news sources that cover your area; Exposure primarily views Flickr photo collections, but tapping the Near Me button brings up photos taken within a few miles of where you are.

Radio and audio

The iPhone now gives radio broadcasters another reason to be afraid (or to embrace) the Internet. Utilities such as Tuner ($4.99) and AOL Radio stream live radio broadcasts to the iPhone (even over the EDGE data network). Pandora is a mobile version of the Web service that plays music it thinks you might like.

More interesting is Midomi, a utility that lets you sing, speak, type, or record a snippet of music and then identifies it for you. You can then learn more about the song, search for YouTube videos, or buy it from the iTunes Store if available.

Games

The iPhone’s accelerometer can sense when the device is oriented horizontally or vertically, but those are just two dimensions. Game developers are using the entire iPhone or iPod touch as a controller.

In MotoRacer ($9.99), for example, you tilt and tip the unit to control a motorcycle in a 3-D environment. MotionX Poker ($4.99) is a dice game where you shake the iPhone to roll the dice (with spectacular graphics, I should add).

Apple’s Texas Hold ‘Em ($4.99) poker game gives you a one-on-one table view of your opponents when the iPhone is held vertically or a top-down mode viewing the entire poker table when oriented horizontally.

It’s not all about the accelerometer, though. BattleAtSea ($4.99) is an updated version of Battleship that lets you play against the computer or another person running the game on your local network.

And PhoneSaber … well, the 7-year-old Star Wars fan in me says you need to check it out.

Ebook readers

One area I hoped would come to light is the capability to use the iPhone or iPod touch as an electronic-book reader.

Amazon’s Kindle has its advantages, but why carry around yet another electronic device when the iPhone’s crisp, bright screen provides a perfectly good reading environment?

EReader offers free and paid downloads of titles from its online library of texts (ereader.com and fictionwise.com). I’m partial to Stanza because its catalog included a free ebook I had downloaded on my Mac, but never had the chance (or desire) to read in front of my computer: Steven Brust’s “My Own Kind of Freedom,” an unauthorized Creative Commons-licensed novel about the characters and universe from Joss Whedon’s short-lived television series “Firefly.”

Of course, the software I’ve mentioned is just a sampling of what’s available, and there are plenty of developers working on applications that weren’t finished in time for the App Store launch.

The next time someone tells you the iPhone is “just a phone,” show him one of these.

Jeff Carlson and Glenn Fleishman write the Practical Mac column for Personal Technology and about technology in general for The Seattle Times and other publications. Send questions to carlsoncolumn@mac.com. More Practical Mac columns at www.seattletimes.com/columnists.