A little OT, and heaven knows there's been a million threads about it... but the little devil on my shoulder can't resist.
I didn't own a Treo until the 650. I thought the 600 was interesting, but my barrier for entry was no bluetooth. I was also nonplussed by no removable battery and complete loss of data upon battery death. So, to me, the 650 was a fairly decent bump in feature set from the 600... and I waited for the 650 specifically for that reason.
I would defiintely agree that the 680 was something less of an overall improvement the way the 650 was over the 600. But the reason I made the move was that even with *just* background email and IM, the 650 was so woefully underpowered with memory that it regularly crashed. If I get a crash once every few weeks with the 680 it's amazing... and all that was needed to fix that was a memory bump. So, yeah, the 680 wasn't that big a change... but it was changed in ways that were actually quite relevant to some of us.
To bring this back to the iPhone. There is actually a great deal about this device that is SUPER compelling, beyond the hype. In fact, I could live with the contract and the high price.... IF it was actually a smartphone. And in all reality, the barrier to entry here is mostly about the fact that you can't put third party apps on it. It's got a kickass operating system -- Palm should be embarassed that Apple has done a OS X release for a mobile device this quickly, where they *STILL* don't have Linux out for their hardware (smartphone, Foleo doesn't count).
I think that if Apple were to make subsequent revisions of the iPhone more open, and really enable it as a smartphone, then it would kick some ***. But if they keep it closed and feature phone like, then it just wind up being another player. The confusion point would be... is it a phone with media features? or is it an iPod with a radio and dial pad integration to the contacts application? Personally, I tend to think it's the latter... with woefully little storage as a media device.
I know it would kill battery life, but give me a iPhone with a 30GB drive and open API for third party app development, I'd pay even more to get one. Maybe they could even get fancy and have some flash as a fast-access cache for media files and use the disk drive less frequently to preserve battery.