As far as I can tell, the advantage of an iPhone is that it's an iPhone.
It has plenty of eye candy, pretty graphics and a sexy touch screen - but I use my phone for making and receiving phone calls. From observing others, I have seen (twice) someone hang up on the person they were talking to because their cheek touched the "hang up" part of the touch screen. Not sure how common this effect is.
Another disadvantage is that it has that pretty Apple piano-finish on the outside. Which means every fingerprint, scratch, speck of dust and stain stands out and wants regular cleaning (if you want it to look good). I have yet to see a nice cover for it (but I'm sure that there are more on the way).
The advantages are that it will have lots of applications available (if you need applications), can play music (if you want to listen to music but not carry a phone plus a music player).
I'm not an Apple hater (I have and like my 120Gb iPod), but I tend to think about these things in a very practical manner. To me, it makes more sense to get the "gPhone" (a phone very similar to the iPhone that is being put out by The Google Group). It has wider integration, better support and more options for connecting to non-Apple computers.