Next-generation iPhones likely to focus on internal improvements.
Browser Comparison Between Original iPad and iPad 2
TiPb offers this nice comparison video showing the improvements in the iPad 2 web browser over the original iPad. The original iPad came with only 256MB of RAM as compared to 512MB found in the iPhone 4. This relative lack of ram was considered one of the reasons why the original iPad's browser would have to completely reload pages when moving from one page to another.
As shown in the video, the new iPad 2 is able to cache these additional pages so you can jump back and forth without delay. The new iPad 2 also seems to scroll/redraw each page faster than the original iPads as well. Note that the video's narrator speculates that the iPad 2 may have 512MB or 1GB of ram, but based on software testing, we know the iPad has 512MB of ram, same as the iPhone 4.
Besides additional RAM, the iPad 2 also has an improved dual-core A5 processor as compared to the original iPad's single-core A4.