I cannot shrink my list of iPhone favorite features to one, sorry:
WiFi to my own DSL. Quick internet hits without having to wake a laptop.
Size of the screen. It's perfect for watching movies. Subtitles are legible!
Ability to make the home screen page(s) look the way I want them. I love being able to move buttons that I rarely or never use off the first page, and sticking bookmarks for my favorite news websites on the front page.
Killer iPod functionality (as long as you're not driving a car). I especially love ability to flip from a playlist to coverflow just by turning the thing sideways, Also the touch-screen-to-toggle feature is great for how it will fetch or hide the tracklist and the virtual buttons for scrubbing, repeat, shuffle (and in movie mode, the volume adjustment, play-pause and movie chapters as well). All that keeps the look of the screen so clutter-free, and lets the artists' work shine.
Manual sync: The ability to manually manage content is so important if you have a huge library of stuff. Even with podcasts, everyone has his own way of wanting to manage them.
The external speakers: not fantastic audio but a whole lot handier than carting around some microspeaker solution for when you just want to hear the audio in the room instead of through earbuds. I love watching videos, video podcasts, rental movies again before they expire, and I often like not to bother with earbuds for stuff like a video news podcast.
(I'm afraid I do mentally ding my iPod touch one star for not having external audio, because my iPhone spoiled me).
Contacts and calendar syncs. I finally bother with them because they work.
Notes. NOTES. A grocery list that always makes the trip with me, unlike some of the pencilled ones I've created and left in the kitchen.
More spacious than I had thought (and I have a lot of different-capacity iPods). The 8Gb iPhone holds more of what I want for on-the-go in a smartphone and video/audio player than I thought it would. I have settled into a routine of how much audio and short video to stash on there so I always have room for a movie, a couple dozen more audio tracks and a few more video podcasts. I like changing a little of the content out on a whim and it doesn't take long to get done.