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Now ready for iOS 4 with background processing, Retina display optimized icons, the ability to display webpages on an external display and some new gestures for good measure, my favorite mobile browser keeps getting better. It’s the same WebKit engine that underpins Mobile Safari, yet Alexander Clauss has done so much more with it.

iCab Mobile 3.5 (iTunes, $1.99) is now available on the App Store and there’s a lot of tasty goodness inside.

Features and fixes include:

• Supports background feature of iOS 4
• Added three-finger gestures for back/forward and switching tabs
• Webpage can be displayed on an external display or projector
• Optimized icons for the new iPhone 4 display
• Scrollpad can be switched off
• Webpages which are opened from within another App be can opened in a new tab
• In kiosk mode all controls can be switched off
• Search results can be opened in a new tab on iPad
• Downloads can now be sent by emails
• Maximum zoom level has been increased
• And, of course, bug fixes

And, here’s how those new three-finger gestures work. To switch tabs, align three fingers parallel with the text on a page and deliberately drag them up to move left through the open tabs and down to move right.

Similarly, with three-fingers aligned perpendicularly with the text/layout, deliberately drag them to the right to move ahead or left to go back to a previous page.

That’s rather clever and these gestures work on both the iPad (v3.2) and iPod touch (v4.0), and by extension iPhone.

Other idevice browsers, such as Atomic (iTunes, $0.99) and Perfect (iTunes, $2.99), also offer multi-touch, gestured-based navigation. iCab Mobile 3.5 (iTunes, $1.99) — which includes file download/transfer, full-screen and porn mode — is simply the best browser on the iPad and iPod touch.

I think it’s the best mobile browser…

What’s your take?