The fact that the iPhone runs OS X and I can sync my contacts (with metadata) between my mobile device and laptop is invaluable to me. Sure, the iPhone looks nice and has some cool features and a wicked UI, but I have over 250 contacts and I like their associated pictures, multiple phone numbers, email addresses, and other information to be clean and current.
I can’t stand having that information get mangled in translation between platforms. If iPhone avoids this (which it sounds like it will) I’ll be happy with it despite almost any number of flaws. If it makes calls and does contact management well I’ll happily deal with any rev1 issues while waiting for rev2, and I think this may be the case for many others as well.:
Expect iPhone to succeed, but to do so mostly because it does the basic stuff really well.: