In real world terms with Iron Fist Boxing 3, this means you see shadows, sweat and bloom lighting while playing on the 3GS. Plus, you'll notice additional in-game effects like motion blur on the 3GS. Still, the 3GS only handles this advanced content at 30fps. The graphic improvements can be turned off so the handheld can reach 60fps.
The good news is that designer Realtech fit both versions of the game into one package, emulating a scalable graphics model we've seen in PC gaming for decades. While dual platforms certainly don't aid development costs, it's good to know that the system can work. [Realtech via ubergizmo]