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Windows Phone 8 will not run on existing hardware. BUT Microsoft cares deeply about our existing customers and want to keep their phones fresh.

New and updated features:

• Multi-core processor support: As reviewers
  have noted, Windows Phone runs buttery smooth on phones with a single
  processor. But piggybacking on the Windows core provides support for
  multiple cores—so we’re ready for whatever hardware makers dream up.
• New Start screen
  
• Bigger, sharper screens:
  Windows Phone 8 supports two new screen resolutions—1280x768 and
  1280x720, opening the door to amazing new handsets with high-definition
  720p displays.
• More flexible storage:
  Windows Phone 8 supports removable MicroSD cards, so you can stuff your
  phone with extra photos, music, and whatever else is important to you,
  and then easily move it all onto your PC.
• NFC wireless sharing:
  If you haven’t heard the term “NFC” yet, I’m betting you soon will.
  This emerging wireless technology lets phones share things over short
  distances. In Windows Phone 8, it helps make sharing photos, Office
  docs, and contact info easier—just tap your phone another NFC-equipped
  device. How cool is that?
• Internet Explorer 10:
  The next version of Windows Phone comes with the same web browsing
  engine that’s headed for Window 8 PCs and tablets. IE10 is faster and
  more secure, with advanced anti-phishing features like SmartScreen
  Filter to block dangerous websites and malware.
• Wallet:
  Windows Phone 8’s new digital Wallet feature does two great things. It
  can keep debit and credit cards, coupons, boarding passes, and other
  important info right at your fingertips. And when paired with a secure
  SIM from your carrier, you can also pay for things with a tap of your
  phone at compatible checkout counters.
• Better maps and directions:
  Windows Phone 8 builds in Nokia mapping as part of the platform. Our
  partnership will provide more detailed maps and turn-by-turn directions
  in many countries, plus the ability to store maps offline on your phone
  so you can work with maps without a data connection.
• Cooler apps and games:
  Basing Windows Phone 8 on the Windows core will unleash a new wave of
  amazing apps and especially games, for reasons I’ll touch on in a
  moment.
• Device encryption: To help keep everything
  from documents to passwords safe, Windows Phone 8 includes built-in
  technology to encrypt the entire device, including the operating system
  and data files.
• Better security: Windows
  Phone 8 supports the United Extensible Firmware Interface (UEFI) secure
  boot protocol and features improved app “sandboxing,” so the phone is
  better protected from malware with multiple layers of security.
• Remote management:
  With Windows Phone 8, IT departments can manage apps and phones
  remotely, with tools similar to ones they now employ for Windows PCs.
• Company Hub and apps: Companies can create their own Windows Phone 8 Hub for custom employee apps and other critical business info
• Native code support: Windows Phone 8 has full C and
  C++ support, making it easier to write apps for multiple platforms more
  quickly. It also means Windows Phone 8 supports popular gaming
  middleware such as Havok Vision Engine, Autodesk Scaleform, Audiokinetic
  Wwise, and Firelight FMOD, as well as native DirectX-based game
  development.
• In-app purchase: In Windows Phone 8 we make it possible for app makers to sell virtual and digital goods within their apps.
• Integrated Internet calling: In
  Windows Phone 8, developers can create VoIP apps that plug into our
  existing calling feature so Internet calls can be answered like
  traditional phone calls, using the same calling interface.
• Multitasking enhancements. Windows
  Phone 8 now allows location-based apps like exercise trackers or
  navigation aids to run in the background, so they keep working even when
  you’re doing other things on your phone.

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