The iPhone is finally getting much-sought-after multitasking functionality. The announcement came earlier Thursday, as Apple unveiled the next-generation operating system for the iPhone and iPad.

But the glaring omissions of the latest incarnation of the iPhone 0S 4.0 continue to be lack of Flash and a traditional file directory. This isn't the iPhone we were dreaming about.

Instead the OS focused squarely on multitasking, new enhanced advertisements within apps, iBooks for the iPhone, and the creation of an online multiplayer gaming community, similar to Xbox live.

The OS for the iPhone and iTouch will be released this summer, though iPad owners will have to wail until the fall for their version.

Here are some highlights from the announcement:

Multitasking

-- Steve Jobs: "It's easy to do this in a way that drains battery life, and a way that reduces performance of the foreground app. If you don't do it right, your phone will feel sluggish."

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-- Users will be able to run Pandora in the background while running other apps.
-- Skype will now be able to run permanently (receive calls) in the background without affecting performance or other apps.
-- GPS now works with browser, Pandora or other apps running.
-- Tasks can now run in the background, i.e., uploading photos to flickr.

Create folders

-- Users can create folders on their “desktop” to better organize their apps, i.e., all games can now be put in one folder.
-- Users will now be able to see 2000 apps within a folder, up significantly from the current 180.

Improved e-mail

-- All e-mail can now be seen from same e-mail app. No need to set up mail-forwarding. Fast inbox switching is seamless.
-- Ability to open attachments within the e-mail. You will need the appropriate app from the store to open it.

iBooks

I don’t see people reading books on their iPhones, but iBooks will have an interface similar to the iPad's. "Winnie the Pooh" will be included free.

Multiplayer gaming

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Apple created its own gaming interface similar to Xbox live and the PSN. Supports multiplayer gaming, keeps track of stats, friends list, allow users to send messages within the games.

iAd

Apps will now have the ability to have embedded advertisements that act as their own apps. Instead of clicking on the ad and having it take you to the advertisers Web page, the click will take you to an app-like interface that allows you to buy the product directly.

For example, a Nike ad app would feature the ability for users to create, customize and buy their own sneakers with a couple of simple swipes of their thumbs. In a Target app, users would be able to create their ideal dorm rooms by selecting different pieces of furniture, gadgets, accessories, etc.

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