I am not denying that the iphone has gone leaps and bounds in terms of usability because of the excellent UI and some cool UI related technology (heat sensitive screen, accelerometer, etc)
And believe me it does makes you feel very happy when you use the limited features it offer, however as a device it nearly doesn't do as much as any phone which cost upwards of 20k.
My background - In the past, I have been a devoted SE user (while i was working for nokia

) and then moved on to windows mobiles (O2, samsung) I have used palm treo and have coded for the palm OS. I currently use a viewty and am very happy with it both in terms of UI and technology. I play almost everyday with my room-mates 16gb iphone which i have gifted to him. I will not discount the fact that the iphone UI is awesome!! but read below
Now with my background with phones, lets see how iphone compares
Internet - windows mobile phones do it really well and so does the viewty - if you hate internet explorer, try opera mini or firefox mini. They are all good browsers and yes can do all the shenanigans of zooming in out that the iphone does.
And yes you are correct the Nokia, SE phones don't compare, but the wimo and viewty are really good at internet and email. Install google pack and you get gmail, search, maps, utube et al and yes the UI is almost the same as iphone when it comes to these internet apps.
So if its internet you can find better phones with 3g or higher specs and you would be better off on the road than with the iphone. The iphone afaik has no java or flash support (unless it just came out) on the safari browser.
Email, chat, surfing the web, in your car, in the shop, so fast and so easy - wake up theres quite a few phones which do with this elegance on the road and no you won't feeling like smashing em cos of UI
Video codec support - most wimo phones support h.264 if thats the codec of your choice. infact most wimo phones as well as the viewty support divx, h.264, and throw what you want at em in any wrapper wmv, avi, mpg, etc. iphone is a closed system when it comes to codec support. end of story!!
iphone is also an ipod - there are much better players than ipod out there. try archos for one. and yes quite a few phones out there are excellent audio/video players. so much so that i have no qualms about using my viewty as my car audio/video source (with all the formats it supports why would I)
iphone has a 2mp camera - there are good phones with 3.2 or 5 mp nowadays. mp is not even that important. For someone who travels a lot and is quite forgetful or lazy, it makes sense to have at times a great camera on your phone. great camera is not mp, its about as close to a real camera in terms of picture quality that matter, which may involve manual/auto focus, macro mode, iso settings, fill flash. iphone has none, viewty has em all and so do most WiMo phones. besides the iphone camera does not take videos, forget recording frame speeds and few frill features which other phones offer.
voip device - most phones come with skype today and the iphone isn't the first to do that.
There are so many other things that are missing on the iphone. I am not an iphone hater, i just wish that it could do more. I have played around with an iphone and love the UI to bits, but it has serious limitations for a user like me, and for most people who have used a phone that costs more than 20k+. I am seriously waiting for the iphone 2 and hope that apple makes it do much more things which bring it at par with the average expensive phone available today. Yes what apple does do best is market the iphone to the average user and that is first place where they win handsdown, the 2nd being the excellent UIs they create!!
PS - i work for a large company which has tied up with apple to improve the iphone for office productivity (read vpn client and yes i am part of that team)
Apple iPhone Enterprise-ready with Cisco VPN - The Platform: The Official Cisco Blog
The moment the iphone becomes more productive it is going to be provided as a choice for corporate phone in my office to work on the move. The current timeline seems to be sometime in q4 2008.
I am sure if the iphone hardware 2 and software 2.0 can do more, i will buy one even if it is 40k

that shows how much i like the UI