Update: This Gmail client update is only for devices with Android 2.2 or higher.
Gmail for Android received a substantial update from Google this afternoon - and the AndroidPolice team has agreed: some of the improvements are long overdue, while some of them are just plain cool.
The change blurb that you'll find on the Market page lists some of the biggies, but a major one (for us, at least) has been excluded: quick folder switching. In the top left corner of whichever folder you were in, there was a simple label indicating the name of the folder. This is now a button, similar to the account button at the top right.