Crappy Treo's? I've been a Treo user since the original 180's, and a very happy one.
For the last FEW YEARS I've been using its... Push Email (like Blackberry's); MP3 player; SMS; Web Browsing; Realtime Weather and exchange rate reports etc etc. Not to mention the phone functionality, contacts, calender, to do list, voice notes, and camera.
I currently use a Treo 650 with 1 Gb SD card. It holds enough music for a few hours as well as several of hours of audiobooks to listen too. Plus a few vid clips of the offspring for good measure.
My Treo has great battery life, and is rugged. I like the keyboard (the older Treo 180/270's had no keyboard, which I ended up hating. They had the same thing the iphone has, a touch screen keyboard). It plugs into my car stereo so I can listen to music while driving and never miss a call (pauses music playback when a call comes in). I have bluetooth headphones so I can wander around looking completely different to the wired up ipod noobs with their white earburds listening to a book or maybe making a call.
The iphone has a few things I'd be worried about... battery life... and those acceloromators and proximity detectors look like a recipe for disaster. For example: "it has a proximity sensor so that if you hold it up to your ear, the screen turns off (to save battery) and your face won't press buttons by accident", what about when you go to type something, how reliably will it detect between localized hand movement and an ear?
Finally, integretion. The biggest demand for Smart Phone users these days is enterprise integretion with Microsoft products, especially exchange. If it don't have this then the iphone will be stuck to a very small market of Apple fans. I've watched Pocket PC dominate Palm because of this need.