Bookmark this page and come back in December 2008 if Apple sells anywhere near the 10M phones they're targeting.  Here are more reasons I am not impressed by their phone, and why I'm surprised so many otherwise intelligent people think this is a watershed for the industry.

1. It's closed to outside apps.  It's a "feature phone", not a smart phone.  You are at Apple's mercy to make a good experience.   Sure, it's nice that Apple can control the entire experience, but that only gets you so far.  How popular would iPod be if you could only play songs downloaded from iTunes? 
2. No Keyboard!?!  I don't care how wonderful the on-screen experience is, you will demand a keyboard within a day of using it.  Lesley points me to all this research on haptic interfaces that demonstrates why we don't like to write on glass.
3. No speech?!?  I admit that only 20% of people use speech features on their existing smart phones, but that's because so few phones have Voice Command.  I don't know how people make phone calls without high-accuracy voice dialing. I use it every single day. 
4. Is it a good phone?  Latency is hard to get right in a device like this, and by being essentially a media device, iPhone is trying to do a lot. If you're watching a movie and your doctor calls, it is unacceptable for the phone to take its time answering.  Or if a bad guy starts your building on fire, you need to call 911 without the phone complaining that you are in the middle of a precious download.

Microsoft's not perfect; we don't have the ultimate phone either, but I'll take Windows Mobile any day over the iPhone and I bet serious users will agree.