Pros: Easy updates through Itunes, good customer service, great tool for staying connected
Cons: expensive, must use the AT&T network, few programs are available.
The bottom line: This isn't your grandmother's phone. It is great for people who need to stay connected. Expensive--but worth it for some of us.
My husband bought his phone the day they came out, and I bought mine in September. So far, we've been happy with our purchases. Some of the phone's features are more useful than others.

Phone:
The phone has a scrolling address book which is very useful. I wish that it was easier to get to the keypad while taking a call. When prompted to "press 1 for ..." it takes a bit more than on an average phone. I love the visual voicemail! There is no more listening to 5 boring messages before getting to the ones I actually want to hear.

Text:
The keyboard is somewhat hard to get used to. On my other phones, I was able to text by the feel of the keys. Since the keys are just virtual, texting by touch is no longer possible. I have small fingers, so it is fine for me, but I imagine that people with larger hands would have more trouble typing on the Iphone's keyboard. Even though texting is more difficult, the phone has a great dictionary that makes predictive text even better. I also love the way that conversations are saved so that it looks like an IM conversation. It makes conversations easy to retrieve.

Photos:
The Iphone camera works better than any other cell phone camera I have seen before. The resolution is great, and the photos are easy to transfer to my computer. They are transferred right through Itunes, so every time I plug it in to my computer, the photos are uploaded. The photo album has a great flick function where the photos fly by. It also has an auto-rotation. When the phone is turned, the photos automatically re-orient themselves. The phone doesn't have a flash, so pictures in the dark never come out clear. The phone also lacks the capability of recording video.

Ipod:
The Iphone's Ipod function is very much the same as any other Ipod I've ever owned. It has video capability for watching music videos or podcasts. It also has an album view so you can flick through your uploaded albums. Other than that, I haven't seen many differences in the Ipod.

Weather, Stocks, Notes, Maps:
These are a great way to stay in touch with the world. I use the notes often to jot down things when I don't have any paper handy. The weather updates instantly and is easy to use. The map function shows results as either a satellite or a regular map. You are able to set a search radius, so that results are narrowed down to your location. I like the fact that on the maps, you can see all of the information about a place. You can instantly visit the website (if available) or call the business right from the maps screen. It is a great time saver!

Youtube:
The Iphone has a Youtube available on your home screen. The videos are clear, but slow to load. Sometimes the search function doesn't work very well. It isn't the full Youtube site, so the navigation is a bit different.

Email:
The email function is great. I love being able to stay in contact and read my emails even when I'm not at my computer.

Overall:
*fun for gadget lovers and a great way to stay connected
*I would love to have a cut & paste function for email and notes applications
*I wish that Apple would make it possible for us to use Flash player and other programs
*The edge network is terribly slow (*Think dial-up!) but
is better than nothing.
*Battery life on the Iphone seems to be good, even when you are constantly using it.
*Customer service has treated me good so far. I had one issue (which I believe was my fault) and I took my phone in. They gave me a brand-new Iphone right in the store. I walked out that day.