The biggest downer about the iPhone so far is that most third-party headphones don't work with the recessed headphone port. Some folks have found creative solutions to avoid buying the $10 headphone adapter. I'm not sure why the headphone port is recessed. I really hope it wasn't to drive sales of headphone adapters, but I doubt it since Apple doesn't even manufacture the adapter. Many earphone manufacturers are likely scrambling to include an iPhone adapter with their headphones in the near future.
That said, that's one of the few iPhone problems that doesn't seem solvable by a software update. The iPhone is not perfect, but it's such a leap beyond my plain Jane Verizon LG phone that I feel like I'm cheating on my wife with a twenty-something model (just a hypothetical; no I'm not married). I keep finding excuses to fiddle around with my iPhone; the display is just that gorgeous and fun to play with.
There are hundreds of iPhone first impressions on the web. I'll try and add a few of my thoughts later today, when I'm back home for the evening, but it's safe to say that the iPhone is the most addictive new Apple product since the original iPod.