I work for Microsoft. So that probably discredits everything I'm about to say despite the fact that our family has 2 iPods and has bought hundreds of dollars worth of music from iTunes. Here are some of the things I would have expected from the iPhone that would have been more tempting to me as an i-<Insert here> consumer.
The devices I was hoping for was a real video ipod with video ipod storage (80gb) and a seperate phone with the design of the iPod nano + bluetooth and the phone stuff. The current iPhone just looks like the Newton I lusted over in High School.