Absolutely! I didn't have any experience with it prior to my iPhone 3G, but now that I have it I can't imagine how I dared take my iPhone around without it.
My poor baby suffered a 6-7 foot drop down a flight of stairs when someone ran into me on the stairs while I was using the phone. The iPhone was not scratched, and only the silicon case had a bit of smudging on it that wiped off.
At the moment I knew it was a very good investment.
Of course, yet it does add a considerable amount of size to the iPhone (it effectively doubles the thickness), so when I'm at special occasions or going somewhere nice/on a date, the Otterbox comes off and I either use a thin silicone case or no case at all.
In addition, if you want another screen protector on it (makes it more convenient when you slip it in and out of the Otterbox like I do as stated above), you either have to get A) Anti-glare films or B) Dab a slight hint of baby powder on the glossy ones, so that bubbles don't form on the screen.
Both have worked perfectly for me. I will say the Otterbox membrane on the screen also dims the brightness of the display by about 10%. It's not noticeable, but I put it next to a co-worker's with the same anti-glare crystal film but no Otterbox, and it was noticeably dimmer.
But honestly, for every day use, I don't care. The case is fantastic and it takes a lot of worries off my head when I'm walking around using it. For special occasions I can just slip the phone out of it, to show off.
It is a fantastic case. If you're die-hard about looks during your everyday use (college/work/etc.), then you might want to sacrifice the protection for the looks. Other than though, it is a great investment.
If my phone had dropped down that stairwell without the Otterbox, I'd lose another $299. And I never ever drop things, but again goes to show you never know.