This is a hands-on report, and I really hope that they fix as many of these issues as they can!!
Today I went to the Apple store around 2PM EDT and waited for the iPhone with some friends that I'd had no idea would be there. I bought my phone, and was excited. Got home, couldn't get it to connect. After 15 minutes, realized that a new version of iTunes (7.3) had been released.
Neither 'Software Update' or iTunes itself had prompted me about it, so I ended up manually downloading from Apple.com -- problem solved. Got my content synced over (chose a few specific playlists, mail accounts, photo albums, and the "Unplayed" podcast criteria), and began exploring the iPhone's various features.
1. The overall lack of a [visible] filesystem, and web-browser limitations.
I want to be able to download things from the web on my phone (ringtones from indie bands, content-creations from Mobile17 or band-promotions at Mozes, images from websites that I want to save and open later on my desktop) -- Why did I pay for 8GB of space that I can't friggin use! Is this a joke?
Downloading music is not possible from the iTunes Store (not accessible on-the-go) or even just random websites. The same goes for ringtones, spreadsheets, and other files. One thing that it does do surprisingly well, though, is read PDFs!
There is also no flash support (yet) as many already are aware of, so no cartoons or games either.
2. Why can't I do [obvious task]?
Numerous times I've run into problems with not being able to do very simple tasks... the iPhone's simplicity actually makes it MORE complicated.
I got an e-mail from a company I'd ordered car parts from concerning an issue I'd had, they asked me to take a photo. I jumped at the opportunity to test out the phone's camera (yay!) and was pleased with the quality. I then went back to the Mail section (after taking the picture) and clicked 'Reply', wrote a short note, then went to attach the picture. Wait... you CAN'T ATTACH THE PICTURE! There's no option, since there's no visible file-system.
I then back-tracked to return to the 'Camera' section via the Main menu... clicked the icon I assumed was 'Send this photo' (there are no popup 'text-tool-tips' to help you [as far as I know], so you can only guess what certain buttons do if they're vaguely represented by their icons) and was presented with options to either 'Use as Wallpaper', 'Email Photo' (ding ding ding!), or 'Assign to Contact' -- which I'm sure will sync with your Address Book back to your Mac, very cool.
After choosing the E-mail option, I was presented with a blank message, not including his e-mail address or any of what I'd typed before. Of course he's not in my Address Book, so I had to go back to the Mail section, write his e-mail address on my hand (since you can't copy and paste??) with a PEN.... analog style (wtf!!), then type it in manually into that new message with a new subject. Is this a joke? How is that productive at all... shame on you Apple.
3. You can't type fast without a lot of practice, and entering passwords isn't so private.
Unlike typing (T9 or even just Multitap) on a regular handset with raised buttons, all of the keys feel the same on this one... and triggering the wrong one is ridiculously easy. It seems like they wrote in something to correct common mistakes, but overall your days of casual typing on a familiar 3x4 grid of keys are over. You really need to pay attention on this one or you're screwed.
The other thing I noticed was that when you're logging into various websites... even though Safari blocks out the text as you enter your password... the keyboard still magnifies whatever you're typing to a distance visible from at least 5 feet. Not very safe. This is unfortunately a design flaw with the text entry in general, don't plan on surfing the web in public yet.
So far, the best way I've found to type on the iPhone is by flipping it sideways like a T-Mobile Sidekick. With both thumbs doing the work, you can keep the device steady with your palms and your lettering consistent. However, you can't activate the tilt feature in any area but the web-browser (so you're screwed in the SMS/E-mail areas, where you really need to be able to type). Why would they do that?
4. Messaging? What messaging? Sorry, distracted by all of the Junk E-mail.
No AOL/MSN Instant Messengers, no picture messaging, no video-conferencing (although that's a bit of a long-shot).. and even just sending pictures via e-mail is a pain in the arse unless it's the start of a conversation. (see problem #2)
Also, clearly visible is the lack of any sort of Junk Mail filter. I get a lot of SPAM and this is absolutely critical. Having my e-mail on-the-go always seemed like a luxury to me.... Now that I have that opportunity, anyone looking over my shoulder will see me scrolling through ads for fake health products and notices from banks I've never even heard of saying my accounts have been compromised. How irritating, it could at least import the rules I've setup on my Mac's mail client.
5. Menu navigation blunders.
"Back" buttons change into "Edit" buttons in a few areas... so just when you expect to be taken back further to the Main menu, you get sent into a completely new area. You then have to toggle back out of it with the same button. Argh... extra tapping.
Also, I have to click several times needlessly past the Mail folders just to toggle between Mail accounts... similarly structured to that of an iPod, but with another useless level. Think about how annoying "Artist -> Albums -> Useless -> Songs" would be... having to tap that extra time for no reason -- it's like that. I don't need to go into the "Sent" folder of any given mail account unless I'm going out of the way to look for it. Even better would be a single screen that I can view the three newest [non-SPAM] messages I've received at each address, but now I'm just dreaming based on what I've seen so far... Sigh.
6. You need an adapter to use other headphones.
The iPhone's earphone connector IS standard 1/8" jack... but it's recessed. You need an extender to plug in any other type of headphones. Apple's earphones hurt my ears so I have no choice but to lug around an antenna-like product from Belkin that cost an extra $10 and is easily lost. Lame.
7. You cannot use the phone as a modem, or browse/transfer files via Bluetooth. Don't forget your iPod cable!
This is a HUGE dealbreaker for me. I loved being able to occasionally tether through my old phone via Bluetooth and surf the web on my laptop... especially on trips. The iPhone does not support this. I am outraged... every phone I've owned in the last 5 years has and this doesn't? And this costs how much?
The only option you have (so far) is to take the new AT&T SIM card included with the iPhone and insert it into any other phone to emulate this feature. It can be removed with a paperclip or sewing needle inserted into the small hole on the top of the phone (there's a panel that releases and slides out from the phone). Tricky, but functional.
It seems that there are no services offered via Bluetooth other than voice headsets (for calling)... not even syncing when you don't have an iPod cable handy! Lame!
8. Google Maps -- Before I find where I'm going, let me find where I am. Hold on.
All phones are required to report a latitude and longitude coordinate reading on Emergency calls in the USA. Why they couldn't use this information to point the map to where you're currently standing? There's clearly a reason for why they didn't do this, but having to zoom-in on or type-in where you're at already is just plain annoying.
9. I'm locked in with AT&T for 2 years on this phone!
Argh! I hope this all goes well since they sure have most of us in a bind.
10. I had to make this list...
...which is the first time I've ever been really disappointed with such a major product.