I played with one over the weekend, and it is perhaps the most beautiful and intuitive piece of tech I have ever seen. Too many downsides for me to switch now, though: no tethering (using the phone as a modem for my laptop), no ebooks, no 3G, no overseas use. And iTunes is too limited for the various music file formats I want to use, as well as video formats.
Apple has really screwed up doing the exclusivity contract with AT&T, though. Stuff like this:
$4800 iPhone Bill
iPhone Bill Surprisingly Huge
is inexcusable, and really does damage to the brand.