I still have, and am still using my original iPhone as my primary/sole phone.
I bought it mid-stream to late in the product cycle. When the iPhone was originally released, only 4Gb and 8Gb phones were available. Later, the 16Gb phones were released. That is what I have, and am currently using.
The last OS update was 3.1.3, and that is what I have. The iPad/music playing software part is still as buggy as ever. I was never a big "app" person, but most have died off and no longer work.
I live in a large metroplex area, but the last few months, I have noticed that frequently my iPhone says "no service" vs having the bars of signal strength. I speculate this is because ATT is winding down service on pre-3G phones, but I don't know that for a fact.
I use other things on the phone, but 99% of its intended use is to either be a phone, or to play music during my daily commute.
If you have any specific questions, ask away.