Fads pass away, but innovation leads to enhancement and improved designs. Look at the treo. People said the same about that, but would you consider it a fad? How do you know this is just a fad, and that it wont lead to better more capable devices down the road? Do you have a crystal ball?
But what exactly is the innovation? Is it taking existing technologies (touchscreen,PMP, phone and putting it into a phone but not increasing the functionality (by exlcuding even more already-existing techonology - 3G, replaceable power units, hard keys)?
Not in my book - it's a new gadget but not evolutionary or even revolutionary yet to me.
The only thing I consider "new" is the multitouch and in my case it doesn't add ANY functionality (keys, scrollers and d-pads do the same thing), but it IS cool (I think I'd rather have that on my 20" apple monitor than a 3 " phone screen if you see what I mean) and a new way to do the same things on a phone. When they add in the total voice domination feature where I can stop using my hands to do stuff THEN I'll be impressed! Perhaps the OS is prettier and faster(?) but that is aesthetics really and things are slowly converging to that form.
Looking at the iPhone there is nothing on it that would make me think..add that to my treo (or my TV, radio, fridge, monitor etc) and it will be more capable. It's like saying I can be more productive with multitouch.
What Tom Cruise did in Minority report was nice (with the images and the orchestra movements of them) but it also looked like a pretty tiring way to look through 5-7 images on a screen!