In Act 3 Scene 3 of Othello, what observation does Othello make when he listens to how Iago speaks?

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It is very interesting to see how Iago chooses to sow doubt in the mind of Othello, his superior, concerning the exact nature of the relationship between Cassio and Othello's wife, Desdemona. Iago shows his understanding of human psychology and how best to prey on a mind as suggestive to jealousy as Othello's. Note the way in which he drops his seed of doubt and then, in response to Othello's immediate questioning, only repeats what Othello says back to his Lord. In response to Othello's question regarding Cassio's honesty, Iago asks a question in return, "Honest, my lord?" He does the same when Othello asks him openly what he thinks, saying "Think, my lord?" This strategy of not openly denouncing Cassio and his suspicions, makes the process that much more effective, as Othello himself recognises:

Think, my lord! By heaven, thou echo'st me

As if there were some monster in thy thought

Too hideous to be shown.

Repeating the words of Othello only serves to make Othello think that there is definitely some terrible suspicion that Iago has that he is afraid to give voice to, some "monster" in Iago's "thought" that is "Too hideous to be shown." Iago thus shows his understanding of his master and of his master's weakness.