[adamjernst]

I think the 4S-specific hardware is the improved proximity detector. This allows you to raise the phone to your ear and speak to Siri instantly. I suspect the older phones' proximity sensor isn't fast enough to support that feature, so Apple figured they'd go 4S only. (It can't hurt that they sell more phones that way.)

[solutionyogi]

Actually, Apple included an additional proximity detector to make sure Siri works when you bring the phone to ear. Here's iFixit report:

http://www.ifixit.com/blog/blog/2011/11/09/little-sister-sir...

This means that Siri won't provide optimum experience (pick the phone to ear and Siri is ready to take the command) for iPhone4 and older versions.