It can do the same things PocketPC Phones have been doing for a few years, only better, smarter, and sexier. It is not, however, a ground-breaking concept at all -Apple simply took an existing product, and made it the Apple way.
I've had a pocket pc phone for about 2 years now, using it for phone calls, email, mp3 and movie player, web browsing, camera, voice recorder, games, office docs, Google maps, etc. It has 
bluetooth, Wi-Fi, and IR, not to mention 3G EVDO wireless broadband, which gives me an average speed f 400kbps or so, but sometimes I get up to 1mbps -you can also tether it to a PC and use it as a modem. Unlike the iPhone, it doesn't make you want to lick it, and any of the functions above except for 3G are much, much, better executed on the iPhone, to the point were there is just no comparison.
bluetooth, Wi-Fi, and IR, not to mention 3G EVDO wireless broadband, which gives me an average speed f 400kbps or so, but sometimes I get up to 1mbps -you can also tether it to a PC and use it as a modem. Unlike the iPhone, it doesn't make you want to lick it, and any of the functions above except for 3G are much, much, better executed on the iPhone, to the point were there is just no comparison.The iPhone, however, has 4 major drawbacks:
1 -You are stuck with a EDGE (2G) data network, which leaves much to be desired in this 3G age- just read the user reviews- so you're kind of relegated to browsing the web via WiFi only.
2- The onscreen keyboard is not great for typing.
3- It does not have a slot for a flash card, which it is a very practical feature that I would seriously miss.
4- You cannot install additional sofware in it, which is one of the major attractions on a PDA or PocketPC.
1 -You are stuck with a EDGE (2G) data network, which leaves much to be desired in this 3G age- just read the user reviews- so you're kind of relegated to browsing the web via WiFi only.
2- The onscreen keyboard is not great for typing.
3- It does not have a slot for a flash card, which it is a very practical feature that I would seriously miss.
4- You cannot install additional sofware in it, which is one of the major attractions on a PDA or PocketPC.
There is one other thing about it that I couldn't quite put my finger on until now: the iPhone is just too pretty. It looks like a toy, not a tool, and I wonder how successful it will be among corporate users.
If Apple comes out with a WiMax version of it to take advantage of Sprint's roll-out at the end of the year, it would make it very hard to resist, though.
