While I think Safari will go a long way in bringing "full blown internet" to a mobile device and that people want such a feature, personally I think it's an inefficient way for information retrieval.
I think direct services e.g. Google Maps over mapquest, RSS vs. Websites, Blog viewing/editing programs (Splashblog), dedicated weather program (like the iPhone vs. web-based weather) are far superior than browsing the web, mobile. They are faster, more direct, pre-formatted for screens and more efficient as they tend to "pull" just the information you want and none that you don't need.
Running java popups (when unnecessary for web content), ads and scrolling over the whole page just seems counter-intuitive for ease of use/bandwidth conservation. Now, the iPhone seems to a long way for making that easier on some fronts like the finger browsing, large high res display to fit more but fails on others: no ad blockers (I imagine), no 3g to download the entire page, downloading more information than needed, etc. Of course I imagine Safari will have some type of RSS capability, but I'm wondering if it's on par with more straight forward systems like Newsbreak, etc.