Apple has recently posted a fairly comprehensive listing in their support database detailing the differences between the iPhone 4 operating on a GSM network versus a CDMA network. This is, I imagine, a direct response to people’s comments regarding the limitations of the Verizon iPhone 4 (such as not being able to hold more than a 3-person conference call, lack of Setting.app setting for call forwarding, call waiting, caller ID, etc), and blaming it on the Verizon iPhone 4’s hardware, potentially leading people to believe that Apple may have cut corners on the device. My suspicion (with my admittedly limited knowledge) is that many of these differences will be absolved once an LTE iPhone becomes available.
According to the support document, however, these differences are not due to the actual phone hardware, but rather restrictions and limitations being present (in a technological, not administrative sense) in CDMA networks versus GSM ones. Other differences noted include CDMA networks not supporting the ability to put a call on “hold” (although I wager that Apple could have implemented “selective muting” for this purpose), or the Verizon iPhone’s ability to actually dial a hard pause (something which the AT&T iPhone 4 does not currently do). This is in addition to other differences between the networks, such as differences in call and data reliability, and differences in data speed that have been noted separately from this article.
I recommend that you take a look at the full article over at Apple.