I've had an iphone since march and while I was initially psyched about having it, my admiration has begun to plummet. At this point, I can't wait until I have an android offering to choose on AT&T, or until I just up and leave AT&T for Sprint or T-Mobile.
Despite the tag line, the iphone definitely doesn't always, "just work". Lately, my phone becomes unresponsive, cell calls don't show up on my phone until I power cycle the device so it can refresh itself, the ipod function stutters and skips if I'm trying to do anything else on the phone, the shuffle feature is basically useless due to a horrible randomization algorithm, and the playlist will jump from the end of one song to the middle of the next song for no reason.
There is a fair bit I do enjoy, and when it's working smoothly, the interface is slick, but it's a pain that the homescreens have no real organization options, which becomes an issue with all the apps that can be downloaded to the device. My favorite feature by far is Visual Voicemail, but now we can get that via Google voice on pretty much any device other than an iphone, so it's no longer a killer app.
While it's the best all-in-one, feature-rich smartphone available from AT&T, I don't think the iphone is hands down the best phone. I've played with the Pre a bit and think it's pretty slick, but I'd need more time with it to be sure. I really like the openness of the software on both the Pre and the Android OS.