Apple (AAPL) previewed its upcoming third version of its successful iPhone operating system, showing off countless new features in a major upgrade.  

Long-awaited features like copy and paste functionality, and multimedia message-support, and push notifications for applications were just some of the new features demonstrated, but Apple says users can look forward to 100 of them as the OS seems to be quickly bridging the divide between mobile and desktop computing platforms.

The blogosphere has been abuzz for a while now with predictions of added functionality for copying and pasting, support for sending and receiving multimedia messages, and other features that are standard on some competing mobile operating systems. Apple had even more up its sleeve, adding not only those functions, but also push notifications for third-party apps, added ‘Spotlight’ search, peer to peer connectivity, and a slew of updates to existing apps.

Apple Senior Vice President Scott Forstall of iPhone Software, who was presenting at the preview, said the OS will be a free upgrade for iPhone 3G owners and will cost $9.95 for iPod Touch when it's released this summer.  He said owners of the original iPhone will be able to upgrade, but some of the new features might not be available for them.

Click here to view a stream of the event.

Here are the highlights:

Copy and Paste

Double tap on a word to see a cut, copy, paste menu.  Do the same on an empty space to see the menu again to paste in any application.  You can also copy content from the Web.  Pasted the wrong thing?  No worries; just shake the iPhone or iPod Touch and it will undo or cancel.

Messaging Updates

Not only did users wishing for multimedia message [MMS] support get what they wanted, but iPhone OS 3.0 will let them also delete and forward individual messages and even allow sending and receiving of files.

Push Notifications

Forstall even admitted that Apple has been “late on this one.”  Using this, third-party apps can push updates to the phone as they come in, rather than the user launching the app and having it check.  For example, say you’re using an instant-messenger program.  Right now, you need to have that app open to send and receive messages.  Using push technology, you can close the app and remain logged in.  When a message is sent to you, you’ll be notified and able to open the app again and respond.

Spotlight and Search

A core feature of Apple’s desktop operating system, OS X, is Spotlight.  This allows you to use one search field to find anything on your desktop.  With the new iPhone OS, users will have similar functionality on their phones.  From the homescreen, flick to the left and typing some words and the phone will narrow down the search results, displaying email messages, app, contacts, and other things.  You’ll also be able to search within the mail app, the calendar app, and even your iPod songs.

Peer to Peer [P2P] Connectivity

iPhones will be able to “talk” to each other using Bluetooth as well as directly to accessories.  No need to even join a Wi-Fi network.  The implications of this are huge.  Think of multiplayer games and FM transmitters that can be controlled directly from the iPhone’s screen all without any wires.

Other Updates

The calendar app will support Microsoft (MSFT) Exchange as well as calendar subscriptions.  The stocks app will have many more details on the stocks in your portfolio; it will even have news stories on them.  The photo app will allow multiple photos to be emailed at once.  App developers will now be able to use the built in maps app, possibly opening the door to real turn-by-turn GPS direction apps.

Users will also find the ability to use all the key Apple apps in landscape mode.  Tilt the iPhone or iPod Touch sideways and you’ll be able to write emails and notes using a widescreen view.

What’s Still Missing?

Of course these are all welcome, and some even unexpected, additions to the OS, there are still some more features that many users would appreciate.  Stability in general wasn’t specifically addressed at this event.  Many users complain of apps, even some of the Apple-provided ones, crashing quite a bit and bringing them back to the homescreen.  This OS update is still in early development, however, and this could be addressed later on.

Better file management would be useful.  Right now there is no Apple-provided app that lets users actually look through the files on their iPhone.  A “Finder”-like app (the Mac equivalent of My Computer in Windows) would be great to complement the new Spotlight functionality.

And what about the ability to open links in Safari in new tabs?  While it’s great that Safari, the Web browser, lets users open multiple tabs, it would make browsing such a better experience if you could select a link and have it open that link in a new tab so that you don’t need to lose the page you had up.  This is half the point of having tabs on a desktop PC’s browser.

Catching Up to Palm’s Pre

Among the chatter leading up to this preview event was talk that Apple may add some of the features the Palm Pre will have in order to better compete when it’s eventually released.  This upcoming and highly anticipated Palm webOS, was demoed at the Consumer Electronics Show in Las Vegas last January.  Among the iPhone “killer” features are true universal search, allowing apps on device (and even the Web) to be searched from one field on the device.  And true multitasking was also said to be core feature of this OS.  According to Palm, you can switch apps with a flick of the screen without having to exit the one you’re using, which stays active and connected to the Web.

It looks as though Apple did try to get in on some of this action with this 3.0 update.  The push notifications would keep apps somewhat connected to the Web in that updates from the Web would be delivered to them.  App developers will also now be able to have their apps access the iPhone’s email, streaming videos, and even the iPod library without having to quit the app, which will reduce the need to switch apps.

And the new iPhone Spotlight feature will offer similar functionality to webOS’s universal search.  Of course how well all these features work will really only be known when both operating systems are released.  Apple said users can expect the new OS to ship this summer, while Palm has said they expect to release the Pre in the first half of 2009.