What I would like in the next update...
As it stands now, my iPhone is great for what I need to do. However, reading some of your comments has made me ask myself how it could be better.
I reckon...
1. An easier way to scroll text in fields. It takes a while at the moment to tap-hold and then sort of slowly drag it across.
2. Home screen wallpapers would be great, it would make it a lot more personalised.
3. Cover flow needs to take note of where I am in the iPod app before it switches, the same as iCantWait suggested.
4. MMS would be great, but it's not a feature that I use too often. I find it better to email the pictures to people, but receiving MMS messages can be annoying as I can't view them straight away.
5. Additional Bluetooth profiles would be awesome, it'd be able to work with my TomTom, and if Apple should release some Bluetooth headphones, that would be cool.
6. Video recording for those moments when you've got to film it.
7. I'd also like to see the iPhone syncing with Mail's Notes & To-Dos.
To those requesting Flash, I'm not sure if that would be a great idea as I'm not sure if the iPhones processor would be up to it, especially sites with lots of animation etc.