I've had an iPhone for about 2 weeks now (Xmas pressy from me to me) and I'm loving it.
The screen uses a weird form of touch sensitivity that makes use of the heat from your fingers, if you use a stylus it will not work, even a fingernail fails to operate the screen! This way it cannot be accidentally operated whilst in your pocket but.... it also means that if you have even moderately manicured nails(my wife) they get in the way and it doesn't work!
It took me a while to get used to the keyboard but once you realise that you can keep your finger down and move around to get the right key its easy.
As of the 15th there's a new firmware update(1.1.3) that introduces some new stuff:
Multiple SMS recipients
Home screen icon rearranging
Multipage home screen(s)
Bookmark web pages to the home screen
Pseudo GPS using the cell towers in Google maps
There's more but this is the fun stuff for me.
I'm no PC or Mac fanboy but I've come to the conclusion that Microsoft are good at the big ideas but they're rough around the edges whilst Apple are good at making the small stuff work.
What I mean by this is that there's nothing really revolutionary in the iPhone but its a pleasurable thing to hold and use, just the way the thing scrolls or zooms in will bring a smile to someone's face.
When I was in London I wandered into the Apple store on Regent Street. Having worked with PR1ME's, VAX's and PC's for 20+ years it was (almost) a revelation to come across such a cohesive experience. I almost bought an iMac just for the sake of it but realised that I wouldn't be allowed to live long enough to take it out the box