If I were in your shoes, I would return mine for a refund and wait to see what happens with the 2nd generation, but that's just me. For a lot of people, it seems like having a 1st generation model is important. I guess it's a question of what's most important to you.
I waited to buy an iPhone, because my T-mobile contract has another year to go, but I was thinking about buying one as a gift for my Dad, who's birthday is in August. Since he's not tech savvy, has no patience and uses a PC (they all kinda go together don't they?) I wanted to make sure they were as easy to use as they seemed, so I started going on message boards to get "street reviews." While no 1st gen product is perfect, I'm blown away by all of issues the iPhone has.