5) A 2 Megapixel Camera -- (yeah it's ony 2MP, but it's 2MPs more than you get with an iTouch)
Our first real digital camera, a Canon digital Elph was only 2.1 megapixels; and it took great photos. Not for huge enlargements, but for snapshot variety photo prints ordered from one of the many real photo services it was perfect. I think the iPhone camera takes pretty great photos, too, for what it is. Plus they can and I suspect will before long add video clip recording to the iPhone camera.