I love my iphone - i have to be honest the price put me off but when my husband upgraded to 3g i got his 1st gen for free, I already had an 02 chip so i haven't signed up for an iphone contract yet so I don't get the cool voicemail doohicky but my life is on it, synced with my work mail and gmail, my calender, alarms and to do lists, i've got recipes, my music and all the obvious phone bits.
Little touches that the scrolling history on your text msg is genius - gone are the days when someone texts you "YES" and your like "YES F***ING WHAT!" because you can't remember what you sent them 2 days ago and you have to trawl your sent box (assuming you had one)
My iphone case is even awesome. Its a bit like a purse, a leather slot in section for my phone and the other (opening) side has slots for my cards (so I'm super screwed if i lose my phone but that'd be my fault not the technology OK!!)
I have to say getting one FOR FREE is almost the sweetest part about it.