While the upgrade from Android 2.1 to 2.2 is only a single point increase, it's really a major update. The biggest change is one that isn't immediately visible; the addition of a Just-In-Time (JIT) compiler. Android apps are Java based and the addition of a JIT compiler increases the speed of some apps by up to 500% (and this isn't just hype, this is actually measurable). While the EVO already had a pretty fast processor, now apps run smoother and faster than ever.
The second major enhancement is the addition of Flash 10.1. While the built-in browser was already pretty good, with Flash it should be able to handle even more sites. I've only tried it with a few sites so far but most seem to work OK except Hulu, which gives an error that videos are not supported on my platform; I don't know if this is a problem with the browser or if Hulu is just being a dick. They also added support for animated GIF, something that had been bizarrely lacking in previous Android versions. Now I can view Weather Underground radar loops, something that was impossible with the old firmware.
Another major improvement is with the lock app. Previous versions of Android had only a pattern-based security lock; you'd draw a pattern on the screen to unlock your phone. Unfortunately, you'd often end up leaving finger smears on the screen making it fairly easy to figure out your pattern. You now have the option of using a pattern, a PIN or a regular alphanumeric password. Previous versions also locked the phone immediately when you turned off the screen, now you can set a grace period of up to 15 minutes. Now I can walk around the grocery store without having to choose between leaving the screen on the whole time or constantly entering the unlock code.
Bluetooth voice dialing as been added. All I have to do is press the button on my headset and say "Call John Doe" and it will dial the phone for me. This will be especially useful while driving.
The camera app now rotates with the phone so you can use it in any orientation; the old version was locked to landscape. You can now activate the flash LEDs in the camcorder app so you can record video in low light. The flash LEDs are a bit too bright, though, and tend to wash out the image if you're too close.
The messaging app now makes it easier to send pictures and other attachments over MMS. Previously you had to initiate sending an image from the gallery app, or a video from the video app, etc. Now you can attach a file from within the messaging app.
HTC has included a flashlight app that turns on the flash LEDs to one of three brightness levels; at full power it's nearly as bright as one of my CREE flashlights, though unfocused. I can only imagine the amount of power this app consumes.
The app switcher has been tweaked slightly; it now displays the last 8 apps used instead of the last 6.
The Market app can now update all your apps with a single button press instead of needing to upgrade each app separately. You can also configure apps to update themselves automatically instead of just displaying a notice about an update being available. The Market will block the auto-update of any apps which have changed permissions since the previous version so you can verify whether you want to do the install.
Unfortunately Sprint appears to have cut out one of the major improvements to Android, the built-in free tethering. While the EVO originally came with a tethering app and still has one, it requires a $30/month tethering plan (on top of the $10/month Awesome Phone Fee). Obviously I'm going to have to hack my phone to get around this.
I'm still discovering new stuff. There's supposed to be a way to transfer links directly from Chrome to the phone (Firefox to phone would be more useful), and there's supposed to be some tweaks to Gmail (which I rarely use), and there's a screen brightness widget (but I always leave it on automatic). There's a share apps app which appears to send links via e-mail, SMS or various social networks, but I haven't actually tried it yet. Froyo allows you to install apps to a MicroSD card instead of main memory; I still have plenty of space left, so this doesn't really do anything for me, at least yet.
I'm extremely pleased with Sprint and HTC. They could have screwed around like Samsung did with my roommate's phone and taken years to release an update. Instead, they had a major update available less than 2 months after the initial release. Hopefully they'll be just as quick with Gingerbread, Android 3.0.