Features of 802.11n
802.11n is an ambitious standard. In fact, it is so ambitious that the proposed standard has been revised multiple times, and has been "on the table" so to speak for nearly 5 years. It is worth noting that the 802.11n devices that we see in stores now are based upon a proposed 802.11n standard from 2007 - it hasn't been accepted or finalized by the IEEE. (Editor's Note - This article was originally written in 2009. As a reader correctly pointed out, the 802.11n standard was approved in September 2009. It 'only' took 7 years. See the Cnet article referenced in the below comments for more information.)
Wireless N uses a technology known in the industry as MIMO. This stands for multiple input, multiple output. In effect, instead of a device having a single antenna, it has multiple antennae that are arranged so as to have maximum transmitting power, and maximum reception. In simple terms, it is the difference between trying to shoot a fish with an arrow and simply grabbing it with a net.
Wireless N claims "real world" speeds of 130-160Mbps, with a listed maximum of 300Mbps. This is reliant on the router transmitting in full 802.11n mode, which is impossible when an 802.11g device is also connected to the network.
As far as the wireless band goes, 802.11n devices can operate on 2.4 or 5GHz bands. However, to use 5GHz all connected devices must be 802.11n compliant. Note, too, the 5GHz band will significantly decrease the maximum range. The tradeoff is that there will be much less interference, although 5GHz is less effective at penetrating concrete and brick walls.