Based on the strategy that Apple has used in prior years for its release of the iPhone, iPhone 3G, and iPhone 3GS, it seems pretty safe to assume that the same strategy is being employed for future generations too.
In looking at this Palm Pre vs. iPhone comparison, the screen appears to be very similar on the two devices.The Apple iPhone 3GS has a 3.5-inch multi-touch display with a resolution of 320x480 pixels.
While it may not be quite as substantial an aesthetic upgrade as you'll find when going from a Palm Centro to a Palm Pre, there is enough of the new stuff with the iPhone 3GS to make it a new iPhone.
The company took this drastic action because of extremely high demand for the new iPhone model, which exceeded preorder levels of the iPhone 3GS by about 10 times on the first day of sales.
Bringing an iPhone 3G up to speed with the iPhone 3.0 firmware will certainly help, but the iPhone 3GS does bring some new hardware in there as well, as mentioned in the previous section.