Basically they are providing background services to applications for seven specific actions or areas: audio, voice over IP, location services, push notifications, local notifications, task completion and fast app switching. Although the method is not considered 100% true multitasking, it will enable things like streaming music through Pandora on the background while checking your mail, or receive calls from services like Skype even when they are not actively running.
Turn by turn navigation apps can use background location to provide directions, while continuing to perform other tasks, and location-aware social networking applications like Loopt won't require GPS to be always-on. A fourth and fifth enhancement relates to the company's existing push notification service and a new "local notifications" service that bypasses Apple's servers. Task completion will enable an app to start a job and finish it after the user has closed the app, and fast app switching allows an app to save its state, stop running, and then restart instantly where you left it.
For users, multitasking will reportedly work transparently and fast -- simply double-click the home button and a tray showing all running applications will open. The functionality was highlighted by Apple's chief executive as just one of the top seven "tent pole" features of the new release, along with hundreds of other user features and 1,500 new APIs for developers to leverage in their apps. Multitasking will work only in the iPhone 3GS, iPad and third-gen iPod touch.