From what we saw at the Nintendo Media Summit, the city is just another place to go. Instead of Tom Nook's shop in your own town, you can buy from an upscale store. Instead of waiting for the fortune teller to visit, you can see her in the city. A few minor additions include a city-based auction house and theater where you see shows.
The rest of the updates seem equally subtle. You can play with your Mii face. Up to four players can meet in one of their towns or the city. Gamer can talk over the WiiSpeak microphone (sold separately). You can type messages by plugging in any USB HID keyboard. Otherwise, it's Animal Crossing again.
If you've kept up with the DS game, you'll be able to import that character into City Folk. Your catalog of items will transfer over, enabling you to buy them again. (Huh, that sounds familiar somehow. We can't quite place it.) But you'll still begin as Tom Nook's indentured servant, since the bell currency doesn't get copied. The DS will also act as a "suitcase" to carry your character to a friend's Wii, but you won't be able to make progress in the DS Wide World and Wii at the same time; moving on up to City Folk is a one-way trip.
Four-player interactions still require Friend Codes, although you'll be able to meet new people through a mutual friend in that person's town. City Folk won't update you when friends sign on, however. Instead, you need to open the gate to your town and manually check for friends at that point. We were hoping to visit our friends' towns when they weren't home or meet with larger groups. (This isn't an MMO.) At least players can meet worldwide, instead of being limited to their own regions.
If you haven't been bitten by the Animal Crossing bug – and felt a compulsive need to catch them all again – we don't see much reason to grab the new version. But Animal Crossing fans will get another edition of the game they like. Look for City Folk in November or December of 2008.