Wired – We don’t know if Digg’s Kevin Rose is diddling with us, but at a live session of the Diggnation show at South by Southwest he offered the scoop on the new iPhone 3.0 operating system, to be officially detailed on Tuesday.

The new update will bring, at last, copy and paste, Kevin says. It works thusly: You double tap a word and it gets magnified, much like the cursor-placing magnification in the current version. You then pinch to choose the highlighted text (which is apparently indicated by a set of quote marks). Last, you choose from a button: cut, copy or paste.

In the video, the crowd goes wild. Rose then tells us “No background apps.” Sensible, as they would be battery killers. Apple is also bringing parity with the Pre, adding everything that Palm’s yet-to-be released new handset will have.

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Rose also reports that there will be “no video in this release” (recording, of course — we already have a video player).

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