In brief, remarkable: The iPhone is a stunning piece of technology that delivers closely on the hype. It's much more like a slightly slow computer that weighs a few ounces than it is like a cell phone or smartphone. The phone features are a bit underwhelming, but the overall success of the rest of the device puts that into perspective. I've been testing Wi-Fi networks with the iPhone, and while some people are reporting less sensitivity than their laptops, I'm seeing more networks with the iPhone than I do with computers in the same locations.
There's a bad design decision in how passwords are entered, whether for WEP or WPA protected networks or anywhere in the interface: only upper-case letters are shown no matter whether you're typing an upper- or lower-case letter, and the letter or character disappears the instant you type it. This means that it's very easy to mistype a password to join a network and have to re-enter it several times. Of course, once you've entered it once correctly, you should never need to change it.
The EDGE network is spottier around Seattle than I expected. On a weekend outing with my wife and two sons, we lost the EDGE network in a relatively well-populated part of town for a few miles while we were trying to pull up the traffic conditions to make a choice about which road to take. It's now illegal to use a cell phone while driving in Washington state without hands-free gear, and it's always stupid to read a smartphone's screen while driving. (I was at the wheel; my wife, navigating.)