To focus on a specific element, just tap the screen where you want the iPhone to focus. A blue rectangle will surround the area, give it a moment to focus (you'll see it happening), then snap your photo.
To zoom, just pinch and drag the screen as you do with other apps. You can also simply slide your finger along the slider bar that appears once you begin pinching the screen.
To use the flash, tap the lightning bolt in the upper left corner. You can select On, Off, or Automatic.
Cool feature - to quickly take a picture while the phone is locked, simply press the home button twice. The camera appears (and the music player does too). Note, if the passcode screen pops up, you can not quickly access the camera from here. You must go back to the home screen which you can do by tapping 'cancel' on the pass code screen. (Until you unlock your phone, assuming it's locked, no one can access your pictures.) You can also use the volume up/down buttons to take the picture.
HDR - This supposedly allows for a better picture but requires more space. Per Apple's web site: "iPhone 4S captures three photos from that one shot, each with a different exposure level. Then it layers the shots together to create a single photo that combines the best parts of each shot. The wide range of light is more accurate in an HDR photo. And iPhone saves both the original and the HDR photo in your Camera Roll."
You can edit red-eye right in the picture. Tap the photo, then edit in the upper right corner. The red circle with the slash through it at the bottom of the screen will guide you through red-eye removal.
If you lose the "transition" swipe option between photos, you can turn that on/off by going into your "camera roll" and tapping the fat right facing arrow at the bottom of the screen. Here is where you can also turn on/off auto-enhance,as well as crop and rotate.
