Spotify 0.4 has been released for the iPhone and I've been having a play for a while. It's most certainly an improvement over the previous release (and in fact has been re-released due to a fatal error with some routers).
Although I can't see it in the list of new features, audio quality seems much improved - there's a much better dynamic range, unless I'm just imagining the whole thing.
It's now got Last.FM scrobbling. This is good for me, as I tend to use Last.FM as a music discovery service, then search for stuff I've discovered on Spotify.
You can now Twitter out tracks you're listening to but, annoyingly, when you do, it shuts down Spotify and launches Twitter via Safari, so you're now Tweeting about a track you're no longer listening to! But that brings me to another great new feature - Spotify now remembers where you were when you quit and allows you to resume from where you left off.
There's an option to play the iTunes version of a track if it's available on your device, but why anyone would bother having it in their iTunes library if they can store it offline in Spotify is beyond me.
There's a bunch of other new stuff, including a lower 96 kb/s for 3G use and the ability to directly open Spotify links in Safari etc.
Overall, a great update, but please allow Tweeting without leaving the app for the next release :)