I have an iPhone 2G (original) on T-Mobile and have not been that impressed with it as a phone. Yes, it does a lot of other cool things with the web and apps, but I've always found that the apps I really want/need are not free. As far as the phone part itself goes, it only rings about 60% of the time; the rest of the time I just get a notification that someone has called but no ring or opportunity to pick up. Voice mail notification is also dodgy; every time I turn it on, or go out of service range and back I get notification even when I don't have any voice mail. Battery life is also terrible.
Based on what I've heard from users of the newest iPhone 4G, they haven't really fixed many of the problems, just introduced new ones. Previous to the iPhone, I had an HTC Shadow (Windows Mobile) phone and I liked the software a bit more than the iPhone, but its disadvantage was the physical design of the phone. It was a slider, and I wore it out pretty quickly. The iPhone seems to be a little more durable since there are no moving parts, although I have developed some dead pixels in the screen.
I will admit that some of the problems I'm having with the 2G is probably because I'm not using AT&T and have to use some "back doors", though it's not really inspired me to consider buying a new one. It's definitely not worth $300 and being held hostage by AT&T at $80+ a month. The $99 3GS seems more sensible, but I don't think I will ever buy a new one until the AT&T exclusivity contract has expired.
