iPhone Atlas covered this new feature - here's their description: iTunes 7.6 adds a great new feature for iPhone users. You can now manually manage media on the device. This means you can drag and drop music and videos onto the iPhone icon to copy them to the device, or delete music and videos directly from the device while it is connected.
Article, with quick how-to steps, is HERE
Sorry about not posting sooner but I haven't been home. Manually managing music & videos has been available for ipods since I could remember. It was just added to the iPhone with the new iTunes update.
You know how you had to either sync your entire library or make a playlist to sync, well now you don't have to. You don't even have to have the music imported in iTunes, you can just drag a folder of music from your desktop to your iPhone and it will be copied. Just click what you want and drag it to your iPhone in iTunes and its done. You can also delete music and videos directly from your phone which we couldn't do prior to this update.
I never synced my ipods, I always added everything manually and we can finally do the same with the iPhones.