It seems Apple carefully let the release of the 2.0 firmware for the iPhone out a little early. MacRumors was the first I saw with the announcement with a link to the download. 
I am running iTunes on Windows and had to download iTunes 7.7 to be able to do the update and access the App Store later on. Once iTunes was up-to-date with 7.7 and with the iPhone connected and viewing the summary screen, click Check for Updates while holding down the Shift key. This invokes the ability to install firmware manually. It is very important to backup your iPhone BEFORE updating the firmware. You will have the option of restoring all of your data to the iPhone once the update is complete.
The update takes some time but is hands-off and easy. Once it’s done you can restore your data from your backup and the phone resets and shows in iTunes with the new 2.0 firmware version.
Heading over to the App Store revealed a whole bunch of really cool things to try and Twitterrific was the first one to give a go and it worked the first time.
I imagine Apple will release the 2.0 firmware for the general population later tonight or tomorrow. Before upgrading, when I clicked Check for Updates it said 1.4 was the latest, that will change soon
I think we are going to see a revolution in mobile applications with the opening of the App Store. This is going to be cool.