Very impressive. Learned new term today via Facebook.
This gives us a better photo by showing the differences in light intensity (combination of different EV-exposure value) in one photograph. Apparently iPhone4 has it.
Speaking of which, I took a stroll in AT&T store two days ago, and noticed that a twice as much resolution in iPhone4 from iPhone3 is indeed very noticeable. Unfortunately, I am still concerned about its antenna problem as reported by many during its debut, plus I have another year or two before my iPhone3 contract ends. Content is the key.
HDR seems to work by stacking photos together just like some method in astrophotography. So it is more of a software thing than hardware.