Somewhat on-topic, having used the iPhone now, compared to my phone, the iPhone is indeed better (wi-fi, interface, included apps), but if I had AT&T service right now and had to pick a phone for the price (say I was upgrading my contract right now), I would still pick my phone (Cingular 3125, rebranded HTC StarTrk). You can get the refurb version from AT&T for $29.99 right now...
Cingular 3125 (Refurb) Cell Phone - AT&T, formerly Cingular Wireless
It gets about 7 hours of talk time, has Windows Mobile (so 3rd-party apps that can emulate everything on the iPhone), etc. It is a much better deal. Just to head off any detractors, yes, this phone does not have as good of an interface or wi-fi, the iPhone has it there. But for the price, this is a much, much better deal.
One other thing I've noticed is that AT&T is dropping the prices on many of their SmartPhones, and I think that most of the companies know that they can't compete with the iPhone on features, so I think we're going to see their prices start to plummet. At the end of the day, if the release of the iPhone simply means that most consumers can get a SmartPhone that cost $399 a year ago for $149, then I think everyone is going to be better off because of it.