Well my current iPhone 3G (just got as replacement 2 weeks ago) is perfect right now. But I had others that were not.
First original iPhone (from launch) - Battery would not fully charge, replaced by Apple.
Second original iPhone (got 1 week after launch) - Had a single stuck pixel that could not black or dark colors, had for a year Apple would not replace it.
First iPhone 3G (from launch) - A few months after I got it the sleep/wake button started sinking into the body. Last month it sunk some more and was pretty much flush with the top. It also started heating up while charging after the 3.0 update, just replaced 2 weeks ago.
Second (current) iPhone 3G - 2 weeks old, can't tell if new or refurb. Appears perfect right now.
My take from this, don't get launch units.