Multitasking has been announced, but it is rather limited. Most apps will not be able to actually do any processing in the background.
But, more importantly, are new APIs that make it easier for apps to save their state. When you switch away from an app, it'll be instructed to save state. Once it does that, it'll stop getting CPU time - it's still loaded, just paused. If the device runs low on memory, the paused app will be killed. If you switch back to the app before then, it picks up where it left off, otherwise it'll load its state again (and pick up where it left off, just with a brief pause)
Apps will also be able to request a few minutes of background processing to finish a task (like uploading images to flickr or something). True background processing, I believe, is limited to a few types of apps... voip and music are the ones I can remember, but I think there's another. Navigation maybe?
(I am not a developer, and all this is my understanding based on what's been released... I could be wrong. Probably am in some way.)
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