iTunes 7.6 adds a great new feature for iPhone users. You can now manually manage media on the device. This means you can drag and drop music and videos onto the iPhone icon to copy them to the device, or delete music and videos directly from the device while it is connected.
In order to enable this option, click on your iPhone in the left-hand pane of iTune 7.6, then click "Summary." Make sure the option for "Manually manage music and videos" is checked.