Well, I use my iPhone for everything: As a phone(obviously, lol), and it's replaced my previous 16GB iPod Touch(which I've sold on ebay).
Sure, I had web and email capabilities on my previous phone(Sony Ericsson K770i), but they were such a chore to use, that I used those functions very rarely, if ever, after a few attmpts.
Ok, so the camera has no additional functions(yet) and it's only 2MP, but it's still pretty decent for quick snapping.