You won’t notice this functionality unless you hack the iPhone and add additional applications. When the number of applications overfills the screen, you are presented with dots above the dock items. If you swipe your finger horizontally like you do when browsing pictures, you will get a new page of desktop items. Very nice Apple.
It is a system wide interface. If you go to the weather application and add more than one city, you will see these dots and be able to switch between the screen in the same way.
The ironic part is, obviously, that you don’t need this functionality unless you hack your device! For those of you who haven’t hacked your iPhone/iPod (what are you waiting for?!) you can feel assured that Apple is going to shortly offer enough applications to fill your screen and take you onto another one. We’d say you have about 2 weeks to wait ;)