More than a game - a living world.
Of course, main improvement is story and gameplay (and superb multiplayer). Characters are not a bunch of pixels anymore, they feel like real people - you hate them, like them, or otherwise. And you make DECISIONS - let someone live or kill him, and so on. That says something about replay value.
Story is much deeper and more involving. Now you see not only benefits of criminal doing but also worst side of such business. Missions are much, much better, partly due to greatly improved combat mechanics. Cover system works very well.
Driving also feel a lot more natural, objects now have weight, and hitting a pedestrian feels so realistic :). World is large, maybe not as huge as San Andreas, but there are so much more detail that its definitely a better-off. Overall graphics is really good, with only minor FPS drops sometimes.
Multiplayer is must-try, there are many different modes, so choose what you like.
So, we can see that game really improved a lot since GTA 3, VC and SA. But why is it revolutionary? Because its simply feels different - not just as a bunch of missions with some cut-scenes and different mini-games. No, its much closer to real world - there's a TV, Internet, phone, people around communicate and interact with each other, and you feel yourself a part of this world, not just a player in a game.
That is what makes GTA IV revolutionary.