Correct me if I'm wrong, but I think this has been included since Beta 1, but with Beta 3 it got the familiar blue text to differentiate it.

Beta 1 was surprisingly stable, Beta 2 was surprisingly unstable, and Beta 3 is working out very well. While I don't think Apple would move up any release timeframe because of Gizmodo's unceremonious reveal of the iPhone HD I do wonder if the rumour of its release during WWDC might, in fact, be possible. I believe v2.0 had 7 Betas and v3.0 had 5 Betas before going Gold. At Beta 3, v4.0 is much farther ahead than I recall the other Betas at this point in the game.

Two comments:
The pictures don't do a very good job of explaining what's going on. This will be a big disaster outside of the USA until Apple introduces an English dictionary for the iDevices.
I don't write American, I write using English. Having the squiggly red underlines is annoying if all the suggestions are going to be incorrect.

Apple needs to get the finger out and put UK English, Canadian English, Canadian French etc. dictionaries into the iDevices.

This was listed among the features from the very first beta of 4.0 a month ago. Good to see AI is up to date. :s

What does this add to the spell-check and word-replacement that iPhones have always had? Is this just for times when you didnt accept the spelling suggestion the first time, but should have, and want to go back and have another shot at checking your document?

Anyone else here not like the blue text? It seems a but unclear with the black background.. red would make more sense to correspond with the underline or green to contrast it conveying a correct suggestion.

On the other hand, I could just be going mad..

The upper right picture - Is the OS offering phrase completion suggestions? I don't see any letter(s) below the three suggestions.

File a request with Radar. Localization requests usually aren't going to get processed and added to the software in a social forum.

OK...

You are using an American computer, not a computeur.
Welcome to the 20th century, we've evolved past the linguistic quirks of the 19th Century.
You can start dropping those extraneous vowels, medieval spellings and butchered hick pronunciations. Since the collapse of the British Empire, even more modern offshoot dialects have evolved like the cowboy, aussie and kiwi. However we still don't let Garth Brooks have a special computer that types y'all instead of you. English accent and pronunciation has never been static throughout history, why start dragging your feet now?

Maybe it's time for all the fringe English dialects to stop confusing the matter out of cultural bias / fear of evolution and make a slight effort towards making communication easier. I mean we let you have the computers, the least y'all can do is edit a few stray letters to try & stay current.

What, spell bolour with a K? Kolour. What a silly bunt.

Sometimes computers are designed to conform to the user, rather than requiring the user to conform to the device (or to the wishes of forum trolls). Im not saying Apple designs that way, nor that its one of their strengths just that sometimes it happens