A major surprise after installing iOS4 on my iPod: Devanagari, Gujarati, Gurmukhi, and Tamil display correctly! Not only that, this OS has Indic fonts that OS X is still missing: Bengali, Oriya, Telugu, Sinhala, Kannada, and Malayalam. Plus Lao. There is a bug in Sinhala.
Major scripts still not available are Ethiopic, Khmer and Burmese. There is a Tibetan font, but it does not render correctly.
A test page for some scripts is here.
iOS4 provides for using hardware keyboards. As a result, a lot of keyboard layouts have been added to accommodate that, plus various other changes. Here is a complete list.
The Japanese and Chinese IM's have a Custom Dictionary facility so users can create their own pinyin/yomi to hanzi readings. Chinese IM's have a switch to turn on a "fuzzy pinyin" option (but I'm not sure how that works).
The Emoji keyboard choice only works on devices used in Japan (unless you employ special tricks to activate it). But the Japanese and Chinese keyboards have a key which generates a menu of conventional ascii "facemarks".
Switching among keyboards can now be done via a menu that appears when you hold down the "globe" icon.
Voice Control has 24 languages. VoiceOver has 21 and can be set independently of the OS language.
Also see this earlier article.