Oh, and if you haven't used the latest Lightroom 3 Beta, I recommend getting it and playing around. Great improvements. Even simple things like just browsing catalogs are much faster. It feels more polished now.

Lightroom 2 and 3 have lens correction, but it's just chromatic aberration and vignetting. I agree they need barrel distortion correction and other expanded options there. I'm not sure what sort of corrections are done automatically, if any. Right now, the recommended way to go is to get PTLens.