It’s true, and oh-so-handy. Make sure to set it (MobileMe) up for free under Settings > Mail, Contacts, Calenders.
This might not have anything to do with the actual iOS 4.2 release, but I’m already upgraded to 4.2 so I can’t really tell. Maybe they’ve enabled it for everyone, regardless of iOS version? It’s confirmed - iOS 4.2 is a requirement. Smart move from Apple to get/force even more people to upgrade.