The basic functionality has been missing since it was first outed back in January 2007. All you need to do is highlight the text you want and a bubble will appear offering that much asked for function.
You can use it in Safari was well as email and text, meaning you can grab any pertinent waffle and fire it off to your mates without any hassle. Hold down for longer to select text in your browser.
In true Apple style, if you don't want any text, just shake to cancel. Neat, we think you'll agree. Still, it's a sad day when we get excited about something so simple. But good work for including it chaps.
Cupertino has also chucked in landscape keyboards in mail, notes and SMS, so anywhere you'd want to type.