A few years ago, when commercial use of the Internet was young, people started transitioning from dialup to higher speeds. I remember moving from dialup to a 56k connection and being pretty happy at how fast it was.
People in this thread have commented that EDGE can actually be a tolerable speed. This is not surprising; the 200k bit throughput that's been mentioned is more than half 384k, and when I had 384k, pages sprumg instantly on to the page.
Some of you may recall that when European adoption of the iPhone was discussed, a demand on Apple's part to put equipment in the telco data center was mentioned. I suspect this means we have a Sidekick like system where data is compressed before being sent to the phone. If this is so, and AT&T does its job in beefing up its network in preparation for iPhone customers, the system could be as fast as it needs to be to make picky customers happy.
Web 2.0 HTML code is much smaller than previous markup, and its use of CSS instead of images to create visual effects makes the situation even better. Standards-based web sites are going to leap onto the page because you can pack a huge amount of information into a few k of size.
I'm sure many of you have viewed YouTube videos and know that their transmission speeds are often poor even on cablemodem networks. It seems quite plausible that most of that sluggishness is on the server side and so YouTube videos will have a similar performance on the iPhone that they have everywhere else - not particularly good but a lot better than nothing.
Between many sites and overloaded networks, it may be that most of us are still struggling with EDGE-class speeds without even realizing it. I think people will be pleasantly surprised about real-world performance in many situations.
Just don't try and download the HD version of the iPhone tutorial video any time soon!
D