This means that after the update the homescreen will show just three icons at the bottom and even the application menu grid will be reduced to a 3x3 grid. Another change that this update will bring is a System Update widget. It will inform you of the current version of the software and if there are any new updates available.
The update should be available to Galaxy S II owners soon. Hopefully, the icon size change will be optional, as it seems like a waste of good display space that some users might like to keep.