After repeatedly retrying the upgrade for about 3 hours due to activation server errors I was finally able to upgrade by Wednesday evening.
Since then things have gone pretty smoothly. Finally having the ability to copy and paste is a godsend, as are basic things one would expect from a phone like sending contacts to other people via MMS/email (unfortunately no SMS), receiving MMSes (although it took 12 hours for O2 to respond to my activation SMS) etc.
Spotlight (the search feature on the home screen) seems useful, although emails not downloaded from the server will not be searched. In order search mails on the server, the search function inside Mail has to be used – a search box has been added which appears when scrolling all the way to the top of a mailbox in email, and after searching emails on the phone, a “Continue Search on Server” option is presented which uses the IMAP SEARCH command to search mail on the server.
The phone screen also seems to have been pimped somewhat with more information visible on the recent calls listing to show which of a contact’s numbers (home/mobile/work/etc) the entry refers to. Had a problem for a few hours after the upgrade where the names of my favourite numbers had been replaced by their telephone numbers, but that seems to have gone away on its own.
The maps application looks very slightly different, with slightly different graphic for the GPS location. Also the iPod application now supports more precise scrubbing to find a position in a track – by dragging your finger down the resolution increases. Also there are a bunch more tweaks I haven’t yet tried…