I haven't used an iPhone in anger so I can't compare, but I got this so I could use Google Maps to navigate public transport: Adelaide's integration is excellent, and as I have no car it's important for Arabella and me.
- Typing on anything that size is suboptimal, but clever auto predict and correct are well done.
- Google maps integration is nice: knowing my location makes getting public transport directions really sweet.
- Since I pay 15c/MB 1.5c/MB for data on the phone network, grabbing onto my home WiFi network where possible is good.
- Google Calendar and contacts storage means I fear obsolete/lost phone much less.
- Plugging in as a USB mass-storage makes transferring music and pictures of Arabella from Linux really easy.
- Some neat features, like turning a map search into a contact (and then easily using a contact when looking for directions).
- Intermittent bugs, such as no characters showing up for SMS when the keyboard is in landscape mode, I discovered can be solved by power-cycle.
- My calendar notifications are completely silent. I've played with every option, but when a calendar event comes due, there's nothing but a glowing trackball to indicate it. This seems to be a bug, but I'm reluctant to factory reset to see if that fixes it.
- Calendar entries default to My Calendar: if you forget to flip that to your google account when first creating the entry, it won't be shared. I want everything mirrored to Google, so several times I've had to delete and recreate laboriously-entered appointments.
- I wish the screen would flip faster; landscape makes a better kbd, but portrait often better browsing.
- Sometimes slowness makes it think I held down a key (giving a special character) when I didn't, and the autopredict/correct seems to give up if you held a key down.
- I have access to Internode's hotspots around the city, but as that needs a username/password logon, it's not useful automatically.
- Battery life (in this stage of intense use) is 1-2 days.
I got it from Portagadgets.com, who were efficient (A$487 + $36 shipping, done via local bank transfer). Getting an account and new SIM from Exetel took longer.
Conclusion: it's definitely usable by non-geeks, and has raised my expectations of future phones. There are some things (such as writing this post) which are much easier on my laptop. But for reading Facebook or Wikipedia, finding your way on Google Maps, or having SMS conversations it's excellent.