So, I'm the opposite. I would take 3G over GPS - I pretty much never miss the GPS capability on the iPhone, but EDGE is pretty slow.
If you know where you are, Google Maps works nearly as well as a GPS - and it's more powerful to be able to get real-time traffic updates. I don't miss the GPS function on my iPhone at all. I just enter cross-streets into Google Maps. And there's always Navizon on the iPhone - if you have it jailbroken for apps. It uses cellphone tower triangulation to determine your locations. About the only time that I'd miss a GPS would be hiking - but I got my iPhone in Sept and my hiking days were winding down. For next year, I'll just use my GPS and carry the iPhone too. But for directions in a city or town, I just use Google Maps and it works great.
But the internet access on EDGE on an iPhone is slow and laggy. It's like click-and-wait. Using the iPhone on WiFi rocks, and I can only imagine that 3G would be similar. WiFi is a battery pig too, but surfing with it makes an iPhone almost as fast as a laptop.
The things that I would like to see on future iPhones are:
1. Able to use any GSM carrier - ie. iPhones ship unlocked.
2. Able to view Flash websites - ie. an Adobe Flash player built-in (I miss Pandora... a lot)
3. Java support - if there's a Java JIT compiler built-in to the iPhone, it's very limited.
4. The ability to add 3rd party applications to the iPhone without hacking it.
5. A standard headphone jack - the recessed headphone jack is incompatible with most headsets.
6. The ability to synchronize the iPhone with more than one computer - this one computer limitation is really annoying when you use multiple computers at work and home.
7. Better Bluetooth support - able to sync with Bluetooth laptops for updating calendars and contacts, and stereo bluetooth headset support
8. 3G support for faster web accessing
9. A built-in GPS
10. Voice-dialing - cheap phones have this - why not the iPhone?
11. The ability to browse webpages offline.
12. A better, built-in IM client.
13. And, although it's probably asking for a lot given I want 3G and a GPS, better battery life would be nice too.
But none of these are worth waiting for, in my opinion. I am pretty happy with iPhone 1.0 and don't miss much. I'm never bored - between being to browse anywhere (slowly) that I can get a cell phone signal and watching movies and music, I have a portable internet entertainment devices that can make phone calls. iPhone 1.0 is pretty good... a few things missing, a few things more limited that I'd like, but not a lot of glitches to speak of.
By this time next year, we should have several different phones based on Google "Android" to choose from, 3G should be more prevalent in phones and from the providers, and I think there will be many more iPhone-like phones to choose from. I'm glad that I didn't wait... although I hacked my iPhone so I'm not locked to a contract and can switch (and Ebay my iPhone) when I see something better.