I stopped by the Apple store with my family this (Tuesday) afternoon and of course they had a few iPhones setup to demonstrate. In general it seems to work pretty good. Some things weren't as fast as I thought they would be though like when you change the orientation of the phone from landscape to portrait. The thing that worked the best was the coverflow in the "iPod" mode. It "scrolls like butter". I love the way the touch screen works.. my mom commented that it looked pretty easy to use from watching me play with it. Youtube also looked pretty good there. I would kind of go so far as to say that youtube looks better there than anywhere else.
I didn't get to try the keyboard function of the screen since the phone's web browser wasn't connecting to the web for some reason. But in general I do like the phone.. however I can't overlook how expensive it is and how it only has 8GB of storage which has to be shared between all the things you would do on it so you can't just load up 8GB of one thing like music or videos. So I can't just sync it up with my Mac and be done because I have lots more than just 8GB of music alone.
I've said it before and I'll say it again.. there are two major things that I would like to see added and that is upping the storage amount to at least as much as the iPod videos and integrated Skype functionality. Or at least iChat with Audio chat support for when you are on Wi-Fi.
Lowering the price wouldn't hurt either. =P
It was kind of amusing hearing a sales person talking to a person next to me about the iPhone... he was simply regurgitating the same stuff you hear on the commercials VERY enthusiastically. I guess it may be good that I don't have that job because I don't know how long I would be able to keep that up.