Apple released iTunes update 8.0.2 last night, which weighs in at 60.3MBs on my MacBook (although the size of these updates sometimes varies slightly depending upon what type of computer you're using for iTunes). Apple lists the improvements the update addresses as:

iTunes 8.0.2 improves stability and performance and provides a number of important bug fixes, including:
• Addresses a quality issue creating MP3s on some computers.
• Fixes a connectivity issue with the iTunes Store when using some Internet proxies with Mac OS X.
• Improves accessibility with VoiceOver.

More important than these iTunes tweaks for iPhone owners, the update paves the way for the arrival of the latest update for the iPhone: iPhone firmware 2.2. Caution: Make sure you sync and backup your iPhone before initiating the upgrade. After installing the iTunes update, simply connect your iPhone to your computer, launch iTunes, select your iPhone, and click on the Check for Update button. Choose download and install (pictured above) to begin the update. See below for more information about this update and a quick tour of some of the new features on the iPhone.

Notable additions of the update include the addition of Google Street View, public transit and walking directions, display address of dropped pins, and share locations via email for the Maps application; improved Mail.app handling of wide format HTML emails; Safari stability and performance tweaks; Podcasts can now be downloaded directly to the iPhone via the iTunes App over either WiFi or a cellular connection; and a new preference to turn auto-correction on or off in the Keyboard Settings. Unfortunately, Apple has yet again avoided adding the most requested feature for the iPhone: simple copy and paste functionality. Fortunately, the addition of share address from the Maps application solves one more problem that a cut and paste feature would also solve. Full update information is readable in the two screenshots below of the iPhone Software Update installer. 

 

One interesting addition of either this update or a previous one that I missed is that preview thumbnails of screenshots you've taken on the iPhone show up in iPhoto (you can take screenshots by holding down the Home button and clicking the power button on top of the device; it will make a clicking sounds and the screen will flash). This never used to work before, and I'm unsure if it is a feature of the new iPhone update, a feature of the last iPhoto update, or a combination of the two.

 You have a few more options when using the Maps application on the iPhone. Once you find a location, you simply drop a pin on that location and then you will be presented with the option to view StreetView (if it is available for the location) or to navigate to the information screen for that dropped pin to email a link to the location, as is illustrated in the following screenshots.

For podcasts, you simply need to go to the iTunes application and select the podcast section, then choose the podcast and pick the episode you want to download, and download like you would any other item on the iTunes application store. Then navigating over to the iPod application on the iPhone, you can play back the podcast or select the "Get more episodes..." link which will briefly launch mobile Safari before launching the iTunes application again and taking you directly to that podcast's page for immediate updates, as is shown in the pictures below.

All in all, this looks to be an excellent update to the iPhone's functionality, but if you've jailbroken or unlocked your iPhone, you probably want to avoid this update as it will undo those changes that you've made.

UPDATE: I just discovered that you can stream audio podcasts to the iPhone without downloading the podcast by simply clicking on the title of the podcast in the iTunes app.

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