OK. Long story short, I got my hands on an iPhone for a couple of days. (There's a story that involves a lot of screaming, some broken windows, a now homeless parakeet, and a very angry midget, but I will have to save it for another time.)
So far the thing really is amazing. The EDGE Internet really sucks but the rest of it works like a charm. It seems they've even got it so the keyboard will come up horizontally while browsing which is really nice.
Verdict? If you are rolling in money pick one up. Otherwise wait until the 3G version comes out because browsing with EDGE will make you want to do something violent.