The release of iOS 4.2 in November 2010 brought a number of great new features to iOS devices. From streaming music and video throughout the house with AirPlay to free Find My iPhone services to changes to the interface, iOS 4.2 offers a number of big changes.
AirPlay is probably the most-hyped feature of iOS 4.2 - and rightly so. AirPlay lets you stream audio and video from your iTunes library, the Internet, and some App Store apps to your iPhone, iPad, iPod touch, or home strereo/theater. While not every third-party app that should support it does yet (I'm looking at you, Hulu), it's a pretty cool technology and seems likely to become more widely used.
Second to the coolness that is AirPlay is its wireless sibling, AirPrint. It does basically what it sounds like: it lets iOS devices print wirelessly over WiFi networks to compatible printers. While the list of compatible printers isn't very long right now, expect it to grow and for printer cables to become a thing of the past.
This service is terrific for people with lost or stolen iPhones. It uses GPS to determine the location of your phone and shows it to you on a map. Then, you can use its features to find the device (if it's lost) or remotely lock it/delete your data (if it's stolen). Find My iPhone used to be past of Apple's US$99/year MobileMe service -- making it free is a big step (though maybe not the last one Apple should take).
The iPhone and iPod touch got multitasking and fast-app switching with iOS 4, but the iPad didn't get these useful features until iOS 4.2. While these are somewhat more subtle features, having them makes using the iPad even more fun.
Another feature that the iPhone and iPod touch had first. Now you can organize your apps and homescreen into a more manageable and good-looking state. Consolidating four pages of apps down to one is pretty satisfying.
Just like individual ringtones can be assigned to your contacts so you know who's calling without even looking at your iPhone, with iOS 4.2, you can assign SMS tones to your contacts so their text messages play unique sounds. This one only works on the iPhone for obvious reasons.
Prior to iOS 4.2, you can prevent the iPad's screen from rotating when you rotated the device using a switch on its side. Since the iPhone and iPod touch don't have that switch, Apple decided to standardize the screen-rotation lock feature and implemented it in software. The former screen-rotation lock on the iPad is now a mute switch.