This is a thorough Wall Street Journal article that aptly describes how Wi-Fi is affecting the cellular market: The crowded cellular market already has plenty of pressure but Wi-Fi poses a threat from a voice and data competition perspective. The article cites Dartmouth College, which has offered students Wi-Fi phones, eliminating the need for students to use cell phones on campus. Hotspots are also threatening cellular operators' plans for delivering wireless data services.
Apparently Nextel has confirmed that it is interested in dual-mode phones that would operate on cellular and Wi-Fi networks. I'll be very interested to watch how cellular operators approach the idea as I still think it will be difficult for them to rationalize handing off calls onto Wi-Fi networks that they don't own.