I pay $15 a month for unlimited data (and I have AT&T), so I don't consider twice that amount to be a steal. They charge extra just for the iPhone. Other plan-subsidized phones don't incur this fee.
I also don't like the pricing of the two models. $200 for the 16GB model, or $300 for the 32GB model. Since when does 16GB of space cost a hundred dollars? And the drives aren't user-replaceable, and it has no memory card slot.
I'm sure the amount of space is ample if you're just using it for apps, but it doesn't come in large enough capacities to take the place of my PMP.
Almost any smartphone can use the internet, email, and has a camera and video camera. There is a free J2ME-based
GPS app available, as well as a free
graphing calculator app. MP3 and video capability are also standard nowadays, although the iPhone has an advantage in storage. There are also plenty of J2ME games around to keep anyone busy; the iPhone probably has some nicer games, but who cares? I would only ever use cell phone games to busy myself when I'm waiting around for something; I'd never use a download-only platform as a serious game machine. Oh yeah, here's an
alarm clock too.