I don't own one, but my brother does, and I'm very impressed with what the iPhone can do now and *most importantly* what I think it has the *potential* to do. I've thought of buying one, but the negatives of the device combined with the negative financial impacts for me (having to pay $60/month vs $30/month for my Sprint plan and having pay an early termination fee (or keep my Sprint contract active and effectively pay $90/month)) have made it a no-go for me. Anyways, as someone who can appreciate the good things about the iPhone but who saw some real negatives about the iPhone, I'd like permission to reply to this thread.
I played with an iPhone at an Apple store on Saturday and played a bit more extensively with the web browser today with my brother's iPhone. I actually created a thread at TreoCentral about my reservations with the iPhone's browser methodology and, after playing with it more, I confirmed my concerns. The browser is cool for showing off to others (when in a WiFi zone, in particular). The idea of displaying a desktop-optimized web page as-is sounds like a great idea in theory. Unfortunately, the iPhone doesn't have an 800-pixel-wide screen (which is what the majority of web sites are optimized for), so what you're left with is a mile-high view of a website where much of the text is unreadable. You then have to zoom in to certain portions of the page to read the actual text (often requiring horizontal scrolling).
What really surprised and disappointed me, though, was how it "handled" mobile-optimized websites. I navigated to one of mine and found that the iPhone wanted to display it as if it was a full-size website. So what I got was a mile-high view of unreadable text.
So one of the big things I would change (and I fear Jobs will be too stubborn to change, since it would require him effectively admitting that the mobile browser majority were already doing it right) would be to offer a "mobile optimized" mode which rescales graphics and wraps text to fit the iPhone's 320-pixel-width or 480-pixel-width (depending on how you're holding it) screen, eliminating the need for zooming in/out or scrolling right/left.