As an owner of an 8 GB iPhone, I've been passing the time reading up on the iPhone. Seems there are a few issues, a few of which I hope Apple addresses (and soon):
1)
Volume level. I didn't realize Apple was sued a while ago as someone claimed the iPod's volume level caused irreparable damage to their child's ears (hello! tell your kid to TURN IT DOWN), hence the software update that implemented a volume lock on all iPods.
However, due to this Apple was very conservative with the iPhone's level limits. From many of the tech reviews, the stereo speakers at the base of the unit can handle more volume, but the device is limited in how much it outputs. As I don't have an issue with the volume while using the headsets, using the handsfree speakers to make calls or listen to songs is next to impossible.
2)
3G, 3G, 3G!!! EDGE is BAAAAAAD. So bad, in fact, I'm thinking of canceling my data plan as it is primarily for EDGE use (WiFi is independent of EDGE and can be used if there is an open LAN in the area, and in most cases their is, so as I'm not using EDGE ($20 more a month) much at all, why have it? (Unless Jobs and ATT actually implement GAN as T-Mobile already is utilizing).
Review quote:
"When not using Wi-Fi, you're stuck with AT&T's EDGE network, which is just too slow to render the lovely Safari interface enjoyably. With speeds in the 50-to-90Kbps range, it reminded us of a dial-up browser. In other words, it's pretty intolerable. We can only hope Apple adds 3G soon, especially since AT&T has a robust UMTS/HSDPA network."
SIDE NOTE: Word is out that there is finally a mobile company in EU that will be releasing iPhone's in November, and apparently it has 3G as this is the primary technology used in most of EU for mobile phone web browsing, but how this is happening (if it is happening) is beyond me. I believe the lawsuit that has halted 3G chip production may only apply to North America (?).
3)
iPod Access. Listening to a song, as it ends, let's say you want to change the song or stop it. You can't unless you are DIRECTLY in the iPod song playing. So, if you're web browsing, a song is ending and the next song is too loud or you don't want to listen to it, the user has to leave what they are doing, go to the home screen, go to the iPod screen, then get into the song they are playing, pause it, then get into the available song lists, pick the song they want, back to home screen, then to the application they were using. A simple "Now Playing" button in applications would be PERFECT, either allowing the user to pause the song or go directly to the iPod song playing.
4)
Attachments: Can't save attachments in email (as most smart phone's are able to do). If someone sends a picture attachment (or even a word or PDF document), you can not download it.
5)
Stereo Bluetooth support. I'm surprised Apple's killer iPod doesn't support it.
6)
Lack of manual management. A LOT of reviews have good points on this.
CNET review:
"The bad news is that the iPhone's iPod leaves out the ability to manually manage the transfer of music and video content. Unlike any previous iPod, the iPhone does not allow an option for manually dragging and dropping content from an iTunes library directly to the iPhone device icon. Instead, the iPhone strictly uses defined library syncing options for collecting and syncing content from your iTunes library to the device.
This should work out fine for most people, but for a device with limited memory the inability to manually manage content seems like a misstep. Our 8GB iPhone was already a quarter full after only a few hours of testing, giving us the impression that users will need to be vigilant at grooming their iPhone library. An external memory card slot is another one of those "nice to have" features."
7)
No SD Memory card (most cards are the size of SIM chips and are used in just about every phone (my RAZR had one), and range from 1-2 GB's in size, which would be assume.
SIDE NOTE: Apple seems to REAAALLLY want to control the user interface, taking away manual management of data coupled with the lack of a Memory Card slot. As iPods allow the manual dragging and dropping of media through iTunes, I don't understand why Apple would limit this with the iPhone as it wouldn't impede the quality or structure. Allowing the options of "Automatic" and "Manual" management makes perfect sense.
8)
Safari: lack of flash (I know, I was opposed to this earlier, but now I realize not supporting flash was a bad move as 95% of websites use it as essential to their site's navigation) and lack of multimedia support. For example, movies aren't playable in the Safari browser, not allowing me to view them or download them for viewing later. As most movies on web pages don't typically surpass 100 meg's, the iPhone has enough CACHE memory to handle the input. Plus, it automatically clears the CACHE while browsing to save room, deleting the stored files from previously viewed pages that are no longer open.
9) Camera. No editing features that most phones have, such as resolution adjustment (high, med, low), color quality or night mode (as most cells don't have a flash, night mode makes dimly lit pictures possible). No video capturing, which for the price of this unit should have been considered. Many technology analysts state this is a hardware issue, not software, so this model will not have an iSight like feature. THAT really disappoints me as I was hoping the release of Leopard might have an update with video capturing/conferencing between it and the iPhone added as a "last minute super secret feature", thus promoting the iPhone again and causing a rush in sales of both iPhones and Macs. Apparently that is just a dream

.
10) Automobile implementation. Unless you are using your iPhone through the headphone jack, you can not use it in a car stereo. My Infiniti has a built in 30-pin connector (much like the ones that come with iPods and iPhones to charge and hook it up to your computer), which is the best possible connection to keep superior sound quality. When I docked my iPhone into my iPod location in my car, it stated that the connection could not be supported and offered me the option of the Airplane mode. I was forced to use the unit through my tape deck via a tape adapter through the head phone plug. Definitely noticed a difference in sound quality, especially on high end car stereo's.
Overall, I like the unit. These complaints are few in comparison to the many, many pro's that the iPhone delivers. However, the lack of 3G will hurt ATT and iPhone sales immensely as many old and new smart phone owners who have made the switch are reporting they are returning the units because of the lack of 3G/HSDPA. ATT spent over $16 billion last year when acquiring Cingular to put 3G/HSDPA through out the nation, offering it in many, many places, so not implementing this into a $500+ smart phone with a 2 year contract was a terrible decision. I'm still shocked they didn't put it in, even before the lawsuit. Even though the lawsuit has halted production, it turns out there are still millions of 3G chips available for implementation.
The other issue is volume level. After googling it this morning and flipping through Apple's own forums and many other forums, it seems volume level is a huge issue iPhone users are facing. Many have exchanged their units for new ones (if available) assuming it was a defect with their particular phone, to find out it is normal for all iPhone units (I went to my local Apple store yesterday and listened to my iPhone's speaker when compared to a few other demo models, no difference, very, very hard to hear, which is bad for handsfree speaker phone conversations).
Other than that, most of the issues may be rectified with software/firmware updates. I just hope Apple gets the ball rolling sooner than later.
Here is the CNET review; very thorough and fair. Definitely read it.
http://reviews.cnet.com/smart-phones/apple-iphone-8gb/4505-6452_7-32309245.html?tag=also