From the Wall Street Journal:
To me, this is the most important feature of the new iPhone 3G S. In fact, the “S” in the name stands for speed. During my week of testing, the new model proved dramatically snappier in every way than my iPhone 3G. Its processor is 50% faster than in the prior model, and it sports a new graphics chip.
Applications opened much more quickly. Web pages loaded far faster. The camera was ready to use almost instantly. And I never once saw the occasional, annoying iPhone behavior where you strike a key while typing and it sits there, seemingly stuck, before you can continue.
Though I thought for sure the “S” in the name stood for Shawn.