Personal reaction: I like this a lot. Lots of points to Apple for bringing a multitouch interface to the market. Interface in general appears well thought through, but hard to tell from a demo. Definitely a bit apprehensive about the lack of tactile feedback, but Apple has a solid enough history with interfaces that I'll withhold judgement for now.

Curious about the sms interface. Looks decent, but I want iChat/data integration (ie, i don't want to use SMS to transmit messages unless I have to).

I'm a little bit held back by the lack of a 3G radio, but wifi is so near ubiquitous now that I could deal with EDGE when wifi doesn't exist (though... not sure I'd pay $20/mo for EDGE). Doesn't mean I've ruled out waiting for the next rev (especially given Apple's history with first gen products).

Biggest diappointment is the memory. It's not enough to synch all of my music, so it doesn't really mean that I get by with one less device (ie, replacing iPod and phone with iPhone). Another possible reason to wait (for me).

It also seems to leave a bit of a gap or imbalance in the iPod lineup. What if I don't want an iPhone? What if I have to use another carrier? The current iPods look so pedestrian next to the iPhone. I'd wager that we'll see a non-phone version of this by the time it's released in June.