How to accommodate for the iPhone 4 screen resolution?

Question

According to Apple, the iPhone 4 has a new and better screen resolution:

3.5-inch (diagonal) widescreen Multi-Touch display
960-by-640-pixel res

Answer 1

This is purely speculation, but if the resolution really is 960 x 640 - that's exactly twice as high a resolution as the current version. It would be trivially simple for the iPhone to check the apps build target and detect a legacy version of the app and simply scale it by 2. You'd never notice the difference.

Answer 2

Scaling to a double resolution for display purpose is straight forward, but will this scalling apply to all api's that input/output a screen coordinate? If not things are going to break aren't they?

Fair enough if it's been handled extensively throughout the framework.. I would imagine there are a lot of potential api's this effects.