This past week, I got myself an iPhone since my wife had to switch to AT&T and it was cheaper to move the same carrier then paying two separate bills. I didn't have a strong desire to get an iPhone, but if I was to get a new phone I wanted one that was new for me to play with. My initial impressions of the iPhone is pretty good although depending on your perspective then it is either an expensive mp3 player or expensive mobile phone. It's whether the combined functionalities justifies the price.
Having access to the internet anytime with a fully functioning web browser is no doubt... awesome. This was my #2 reason for liking the iPhone. This worked pretty well right out of the box and I had no problem connecting through the phone or getting it set up to access my home WIFI. The only thing missing is the ability to play songs from internet radio stations especially given that this is a combined music/video/phone device.
As a proud Dad, I naturally have the urge to show off pictures of my son, but I resisted the "carry 100 pictures in my wallet" stereotype. Well, with the iPhone I can be the modern day equivalent of it and literally carry thousands of pictures to show from the phone (don't worry, I'm not carrying that many). The image quality looks good on the iPhone screen, but since I was managing my photos in Picassa, I had to create an album for the iPhone then export that album to a directory that I tell iTunes to sync. I have to do this each time I want to add a new picture. It's a workable solution but not a great one.
Using VLC, I was able to convert my divx/xvid video to mp4 which I can copied to the iPhone and watch while I travel. The video quality and sound was excellent. I wish I could this as easily on the DS.
As an PDA device, the iPhone comes a little short and is more an phone then a Blackberry competitor at this point. Managing contacts could be easier in my opinion and the default list of apps is what you expect on a phone (calendar, clock, notepad).
As a phone, the quality is good, but the lack of a speed dial function sets it back to the stone age in that area.
As a music player, having to buy an adapter before being able to use regular headphones is plain silly.
The iPhone looks beautiful coming out of the box, but the shining silver band around the display is scratched easily even if the glass is more difficult to get scratched. It doesn't matter though because when the border gets scratched the whole aesthetics of the device is compromized I'm talking about it being scratched by lint, folks! I had the device in my pocket (nothing else there, no coins, keys, pieces of paper, etc) for 10 minutes and it still got some scratches. I had to buy an iPhone condom to protect it from further scratches and to hide it.
Overall, it's a good multi-function device but it's not a PDA with a phone. It's a phone with more advanced PDA functionality then typical phones. Or it's a mobile media device with a phone and PDA functionality. If the iTouch had a camera, I'd probably have gone with it since my wife would already have the internet covered on her phone. The iPhone is a very good first generation device and has a lot of potential to be more in the future. I hope that future won't be dominated by just Apple but that other companies will learn from the success of the iPhone as to what people are looking for and more.