I've had an iPhone for a few weeks and cingular/AT&T for about 8 years. My thoughts in no particular order.
Coverage - Seems about the same as everybody else. I get coverage in Verde field when nobody else does. I got coverage at Crawfords campground when I stood on top of my buggy. On the other hand it drops calls at this one spot on Rt 55 in Apex almost every time.
Exchange/email - I walk into my building, it synchs up with the wifi, and all my new meeting invitations start chiming. The email synchs reliably, I've never had an issue and that's more than I can say for my old Palm/Treo. On the downside, typing email on the virtual keyboard in painful and it's no comparison at all to a real keyboard. (I with with computers and type nearly as fast I can talk.) I mostly use it for keeping the inbox clean.
Web surfing: This is about as good as I can imagine it to be without a bigger screen. The multi-touch expand/collapse idea was brilliant. The "double touch to make this column full width" is perfect for cruising online forums like this. I use it all the time.
GPS: It's pretty cool and apps that build on it like yelp make it cooler. I can look for nearby restaurants and reviews. However, until it gets turn by turn directions that follow you it won't meet it's full potential. I can get turn by turn directions and my current location but I can't get the "turn left in 100 yards" that I want. It's rumored to be coming.
iPod: This works well. It's just what you would expect.
Pandora: I love this app. It's kind of like Satellite radio but free and tailored to your tastes.
Phone: I came from a treo, which was a decent PDA but a terrible phone. In comparison the iPhone is awesome. However, I still think for just phone usage some of the flip phones can't be beat. They protect themselves in your pocket while staying small and the match the size of your head when in use. Also, you don't have to fuss with key locks.
Battery life: I can't imagine wearing it out in a day but you pretty much want to charge it every night. It's not like a normal phone where you'll charge it friday and be sure it's fine all weekend. I listen to it as an iPod/Pandora in my truck so that tends to keep it pretty charged.
Other apps: I like the weather, stocks, and games. As you get into the better phones the games are actually pretty cool.