Facebook today launched version 3.5 of their iPhone app. The update brings groups and added privacy controls to the mobile experience. One of my own personal criticisms of the Facebook iPhone app is the inconsistency between the mobile and web experience.
It looks like 3.5 has taken a giant leap in bridging that gap.
You can also tag friends through the iPhone app, share links, and of course a number of bug fixes were also introduced.
Facebook 3.5 also seems to be iOS 5 beta friendly.
You can upgrade to Facebook 3.5 through the App Store or download it here.