Okay, I actually watched the entire MacWorld keynote about the iPhone. It's the first time I've ever watched the whole thing (that I can remember). I have to admit, it's the coolest thing I've seen in a while.
I think they are getting closer to a converged, single, personal device that does all of what you want to do. There is amazing technology built into this device. Apple has raised the bar to a new level and I think others will quickly follow (as they did the iPod) and as closely as they can without violating the 200 patents Apple mentioned.
The biggest question for me is, How well does the touch screen keyboard actually work? It looks pretty good, but I'd have to actually hold one in my hands and try it. For pointing (not typing) I personally don't mind the stylus approach. It's very precise, cleaner (not rubbing my greasy fingers on my display!), and is using a familiar tool in a familiar way. (BTW, I don't mean that my fingers are abnormally greasy, but all human fingers are. Thus the fingerprints made famous in crime fighting…).
The next question is the browser. It's fantastic to have a full-featured browser on that platform. But I wonder if the little zoom feature would become tiring and bothersome after a while. There's no question that an iPhone for on-line web work and browsing would be **great** if you had nothing else available. That's not the same as having an alternative that you happily use all the time.
Also, IMHO the iPhone is too expensive to buy, but it will bring interesting things to the market that are significantly cheaper. Look at all the MP3 players that follow the iPod and Windows Vista's GUI chasing after Apple's OS X.
Here's one fascinating project that's already in the queue: Moko. The really interesting news here is that's it's an open platform that developers can, uh, develop on. Now that will be interesting.