If you have at 3GS or 4 -- you can upgrade with IOS5 through iTunes. You can then enter the iCloud world, and which promises to syncronize all of your devices without your involvement. For example, when you take a new photo using your phone, it will automatically update your PhotoStream, making it instantly viewable on your other Apple devices.
Some of the cool features touted on the iPhone 4S is the camera; while your hardware is what it is in terms of pixel count; you do get the nice upgrades to the camera app. You can snap a photo now by tapping the "volume up" button instead of being just restricted to the soft button on the screen. You can do the edits to your photos, such as cropping, right there on your phone! If you are a Twitter user, you can directly 'tweet' a photo from within the viewer. Once your photo goes out, you hear a little "tweet". Nice touch. You can watch your photos in a slideshow mode, along with music.
That's just one example of fun. You also get some great new apps like Reminder and Newstand. You do not get Siri, but there are other apps you can use that will simulate similar features, such as Vlingo, Dragon Go, Dragon Dictation and Bing for audio search.
The challenges you may experience in updating the phone can include a need to manually restore your apps, as I had to do. For whatever reason, all of them don't come across. There have been other issue cited by users who were early adopters, and most blame the "incredible" strain on Apple's servers due to all the update seekers. If you decide to do this upgrade, which I do recommend, I would suggest connecting with yours truly...
Have a trouble-free-tech-day!