Well, everyone these days carries a cell phone with a camera installed on a daily basis and I'm sure it would be the same quality.
I really do need more space on my Nano and I like to listen to sports channels on FM, so I'm thinking of upgrading to the new 16GB model for those reasons.
For photos though, I never really use the one on my cell phone though. The quality is so low that it's not worth it to me. I only take shots on my Nikon D90 to get the best quality.
If I don't have a camera around and just my phone, sure I'll use it for a product I like at a store or that rare moment of a UFO sighting. 😉 ...but other than that, I rarely use it.