Some bits are becoming clearer as a few people get hands on with the iPhone after the hype and expectation.
1) The soft keyboard is a problem. David Pogue (
NYT) says it's just about workable with the auto-correction but the keyboard's not as easy to use as the Blackberry buttons.
2) The machine is locked down. No 3rd party apps can be installed, with a possible exception of widgets. So despite the iPhone running some form of OS X, you can't run any of your OS X apps on it. That makes it a less flexible option. You're stuck with the apps Apple give you.
Is the keyboard a big issue? Well that depends on what you'll be doing with the iPhone. It'll be fine for the odd email and text messaging, and entering addresses into a browser, probably not great for lots of text input though. Then again, few small devices are much cop for entering lots of text, the smallest usable keyboard for typing was probably the old Psion Series 5, anything else is button pushing, not typing.
It's not going to be all things to all people, but it's going to do what it aims to pretty well. The UI is attractive and seems to be intuitive, and the styling of the device makes most mobile phones look like they were carved from the ugly stick.
As a replacement for my existing phone and iPod nano, it looks like a possibiliy. It'll integrate nicely (I'm sure) with my Mac, but it certainly won't replace my laptop.