It is a worthy replacement for a music/ video player, plus the new OS features are a welcome release, but IMO it is weak in some areas though, as with the original Iphone & 3G Model
Think of other mobile phones - 5mpx camera is a minimum for a mid-range phone with 8mpx and even 12mpx camera rounding out the high end. The new Iphone has only a 3mpx cam and for the asking price it seems a little thin. My old viewty still kicks out great pics and I have plenty of room to store them thanks to an 8GB card.
I haven't heard any news of this phone's GPS capabilities, but what I do remember was a friend being bitterly disappointed by the meek GPS receiver on his 3G and with all the 3rd party software available, couldn't use the GPS on the handset unless piggybacked by expensive data charges.
By what I have read, the Iphone 3.0 has some great new features yet to be seen on a handset (The compass and tracking abilities, enormous amount of internal storage), but I feel given the technology and capabilities of other phones out on the market right now, I feel this is what the "old" Iphone should have been and this one is 90% perfect, especially with some new innovative features, just with a few areas I personally feel should have been increased somewhat. We would then have the perfect mobile device.