I like my iPhone generally, but I agree iTunes is not exactly super easy to use, and it's fragile. I've had an issue where it wouldn't sync and it gave me some error code every time. I messed with it for a while and finally after Googling and trying things, I had to totally uninstall it, uninstall all of the pieces (Bonjour, Apple Helper), delete all of the pieces and then do a regedit search through my Windows registry to remove every mention of it, then hand-delete all of the remaining iTunes files in my programs area. And then I installed the latest version and everything worked after that... and has still been working ever since... more or less.
I don't think it's total crap, but it's definitely a fragile piece of software, and it's not really super intuitive. I still have an issue where I have two icons for all of my movies after I moved my movies directories around while cleaning up, and there's something funky with the way that's it's updating podcasts (it's not updating podcasts) that I haven't looked into yet.
I think the iTunes store implementation is pretty good - although they can improve the apps searching capabilities - I think the way they do backups in iTunes is slick, I'm not at all a fan of the way it does playlists but it works. In my opinion, iTunes isn't awful, but it's bloated, fragile and not immediately intuitive. I actually think Microsoft's organizing system for Zune is substantially better... and generally I'm not a fan of Microsoft either.
The 3rd is still a brand new never used replacement from Apple in box.
Give it 25 years and that thing will be worth some money I bet. Either sell it now, or keep it... if the lithium ion battery doesn't totally disintegrate (and it might well do so), an original iPhone in mint condition in the original box with everything unopened will be worth a fair bit to the crazy people who buy computer memorabilia.