Been playing with one for a few weeks now. Purely for educational purposes of course....
The GUI and user interface is awesome as is the layout of the functionality. The way the SMS screen works is great, if you do long IM-like conversations.
The 'zoom' functionality is great and really does work, especially in a full HTML web page. You can actually browse full sites (such as myadsl) without having to resort to reformatting the page, which never works 100%.
But by local standards it's an average phone, with no 3G/HSDPA and no MMS. The latter is especially a major oversight. I use MMS's extensively and I now carry a TyTN and the iPhone.
But, by far, the biggest problem is the keyboard. The phone brings up a small QWERTY keyboard and you can only use your fingers to type. The screen does not respond to a stylus. So, unless you've got stylus-size fingers, you're going to be typing very (very) slowly.
Also, the keyboard does not have a landscape orientation, so you're stuck with the tiny, portrait one. The HTC TyTn type keyboard is WAY better.
It does not have an on-line Outlook client and although it runs OSX, third party apps are not that easy to come by or manage.
In summary, it's a great phone if you're not heavy into on-line communications and don't need to type a fair number of e-mails or SMS's (and you don't need MMS)
If you want a slick iPod / mobile phone / web browser combo, you'll be very happy with the iPhone.
What we need is the iPhone with a (very thin) slide out keyboard, HSDPA and MMS support. And none of this locking everything cr@p. If the don't open the OS, it'll fail.
/edit - BTW, the HTC Touch is not the answer to my TyTn/iPhone combo requirement. It's a poor attempt.