I think my main problem with the iPhone is the overkill on the number of devices it encompasses. To me it's just another hybrid device that we didn't really need that badly. I have a Samsung SGH - t609. It has a MicroSD slot for up to 2GB of memory, a 1.3 megapixel camera, an MP3 player, and a great GUI. But at the end of the day, it's a phone. I bought a phone because I wanted a phone, not a handful of gadgets. So I use it to make/receive calls and text messages occasionally. I've never used the web browser on a phone, or MSN/AIM/YahooIM, my phone is always on vibrate so I don't care if it can play back MP3 ringtones anymore (plus my provider, Rogers, has begun selling all of its phones with some kind of copy protection, so you can only use MP3 files purchased from their music store as ringtones).
I just think there's such a thing as "too much of a good thing" when it comes to technology. There's not really much need to cram that much stuff into a phone.
I guess the difference is that I don't want a phone. So having an iPod that has some extra goodies but will also occassionally put through a call to me is a big bonus.
I'm also a fan of just having the phone on vibrate since, as previously stated, I hate ringtones.