I wonder how they'll continue to update the Touch without brancing too much into iPhone territory. Plus the pricing will be interesting with the $199 price point of the 3G.
No the iPhone costs closer to $2,000. Yes only $199 up front cash but you pay the rest in monthly installments over a two year period.
To those who argue that you'd pay the cell phone bill anyways. Yes I would but I only spend about $25 a year on air time. I have an AT&T prepaid plan and seem to average about $25 a year. Turns out here in California is is illegal to use a cell phone in your car (unless parked) and when I'm not in my car I'm near a land line phone