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So I have been playing a lot with new features of C# 3.0 lately. I'm really impressed. LINQ is pretty cool, but it is the features that Microsoft added to implement LINQ that are outstanding.
Some of C# 3.0's New Features:

• Implicitly Typed Local Variables
• Anonymous Types
• Lamba Expressions
• Expression Trees
• Extension Methods

I'm still digging where Ruby and Groovy are headed too. I wish C++ and Java would add Extension Methods since this is just syntactic sugar and is not directly tied to .NET.

Video: C# 4.0: Meet the Design Team
Video: Mads, Anders, and Eric on C# 4.0 - part 1
Video: Mads, Anders, and Eric on C# 4.0 - part 2
Silverlight Video: Anders on C# 4.0 at the PDC