The S stands for speed, and the 3G stands for the third generation, HSPA (High Speed Packet Access – wikipedia link) data network, which is also supposed to bring broadband-like speed to your iPhone’s internet connection. When you’re on the 3G network, you can tell by the little 3G symbol at the top of left of your iPhone’s menu, right beside the signal strength bars and the name of your carrier (AT&T, Rogers, O2, Orange, etc.).
There are several other symbols your iPhone might show instead of 3G, however, depending on the type of connection and reception available in your area and sometimes specific spot.
