HDR photos on iPhone 3GS with iOS4.1
Sorry, the HDR feature added in iOS 4.1 only works on iPhone 4. 


  Take great photos that capture a wider range of light intensity using the new high dynamic range (HDR) setting on iPhone 4, which automatically combines multiple exposures into a single HDR image.


If you want to take HDR photos on your 3GS, there's an app for that: Pro HDR.