A handy new feature is the mini-track. Access it by swiping down on the green bar in an instrument screen where you can cut, copy, delete, loop, shorten, or split the track.
You have greater flexibility with Chords in the autoplay feature than before. Merge Recordings comes with the Keyboard, Smart Guitar, Smart Bass, Drums and Sampler.
GarageBand can now import AIFF, WAV, CAF, Apple Loops, AAC and MP3 files. If you have the Mac-based version of GarageBand, select your iOS device in iTunes, choose the Apps tab, choose GarageBand in File Sharing, and drag the files into GarageBand Documents.
Songs can be wirelessly transferred from the My Songs screen if Wi-Fi syncing has been enabled on your iOS device. Exported audio files can be saved in a variety of qualities.
One feature missing is the ability to use external keyboards and mics with the iPhone and iPod touch. It supports guitar interfaces that plug in via the headphone port, though.