The graphics processor in the iPhone 3G S, the PowerVR SGX supports hardware acceleration of both OpenGL ES 11 and 2.0 reports engadget mobile.
Basically, OpenGL ES is a lightweight version of OpenGL a powerful library of rela time 3D rendering APIs, and while many mobile phones support 1.1 specification the 2.0 specification is less common and kicks things up a tad delivering more complex textures and shading operations.
All this means games written to support OpenGL ES 2.0 will look all the more awesome. The main problem though is 1.1 and 2.0 at completely incompatible and thus applications need to be written to support both. For more info follow the link.