It is very much the poor man's iPhone. Pair it with the right voip apps and try to keep an open wifi connection and you can get pretty close to an iPhone functionally without the $100/month service fee and $2,000+ total cost of ownership. Ear buds + microphone is a great way to go.
However, I now think the iPad Mini should get this title as it can be had with cellular data on-demand for <= $30/month. Pair it with the right voip apps (I think talkatone and Skype are killer myself) + earbuds with microphone and you can even more so approximate an iPhone experience without the $100/month service fee. I switched to this option and am yet to use the cellular option. It's working great for texting and inbound & outbound calling mobiles or landlines for near $0/month.
If there's ever a merging of iPad's 4G hardware and data plans with iPod Touch's pocket-ability, I think you'll pretty much nail the "poor man's iPhone" in full.