I've had a new iPhone for about a week now, so I figure it's time to write up some thoughts about it.
First, the little things. It is, in typical Apple fashion, an incredibly slick piece of work. Scrolling and zooming images or webpages is simple, easy, and, well, just fun to do and watch. Mobile Safari does a great job of making full webpages usable on the tiny screen.
The keyboard is totally fine after a little practice. I don't think it'd work nearly as well for e.g. working at a shell; the predictive text is key to using it well, and getting at symbols is a bit of a pain. Also, I've found that using it (or just using the phone heavily) with one hand (phone in palm, thumb on keys) is horrible for my hand. Doing so for more than a very short time leaves the back of my hand and/or thumb hurting for the rest of the day.
I haven't hacked the phone at all – Firmare 1.1.2 patched the hole jailbreakme used to get in, and my attempts to downgrade the firmware left the phone nonfunctional until I flashed it up again. I may try again later, but I'll probably just wait and see what the official SDK looks like in a month or two.
Edit: Apparently Mail is fetching in the background. That doesn't change the fact that Safari, and hence every "supported" custom "app" (by which I mean webapps), can't run in the background.
I've spent most of the last four days outside of wifi, so I've been using the phone via EDGE a lot. I'm starting to buy into Jesse's vision of a disconnected syncable future more and more. I really want my data local, not 1s latency away, or completely inaccessible because I happened to step inside the wrong building.
I think the summary is: No, cute little JS webapps are not in fact nearly sufficient as a development platform for this thing. It's got great potential, but Apple, please give us a real SDK. When you release your announced SDK in a month or so, it had better let us write apps that are first-class in every way compared to the built-in apps. Otherwise, I will never be able to take the (unhacked) iPhone seriously.