My mom doesn't use internet on her phone. The only thing he uses is the GPS, which would be better to have it on the phone (currently uses an old Garmin)..
I'll buy one for my mom's b'day (if Steve show's up with one at macworld 09').
Incidentally, I know kids, teenagers, young adults and cool downtown hipsters who also don't use internet on their phone.
iPhone Nano confirmed.