As a mobile device, it's great. App selection is cool and things like google maps with GPS is awesome. One big, big drawback though is you can only run 1 thing at once and if the phone rings (and you answer), it auto-quits the app you were running.
As a phone, it's ok. Maybe not even that great. A lot of the time it drops out for me and I haven't changed networks for 10 years and have never had that problem with any other phone as much as I've had with the iphone. I get the "I won't answer the phone call" at least once a day where you try to slide your finger on the touch screen to answer the call and it doesnt respond and I've missed quite a few calls because of that.
I've had mine around 9 months and the battery life sucks. I put it on the charger overnight last night and got the 20% battery warning at around 4pm. I didn't even use it that much today either.
Oh and iTunes sucks ass, hard.
However all in all, I'm pretty happy because I can use standard headphones so I don't need to carry my iRiver + phone on the train anymore, plus as a mobile/internet/email device it's very, very handy.