In order for the iPhone to have any chance of success in some European countries, it actually needs to have 3G data. In the Netherlands, for example, EDGE doesn't exist anymore. So, it's either a 3G good experience, or crawling along at GPRS. Now you know why I haven't given a second thought to an unlocked European iPhone (courtesy of France or Germany) - well, that and the fact that they are very pricey.
More megapixels does not a better camera make. Flash, a better sensor and optical zoom, on the other hand, would qualify the iPhone as a reasonable "point-and-shoot" replacement - at least for simple, day-to-day snapshots of friends. Not to mention video.
More storage space is far from a bad thing. 16GB is a pretty sweet spot - more so than 8GB.