In the months between the iPhone announcement and launch, the thing I considered the least was that it was in fact an iPod, and one with a really big freakin' screen. I've played with video before on my other iPod, but it never struck me as something I'd find particularly useful.
And that's where the phone has really surprised me. I ripped some episodes of Veronica Mars season 2, and put them on the phone. I went to lunch, clipped the phone to my sun visor, and enjoyed an episode right there while eating lunch. It was pretty sweet. (And by the way, I missed season 3 entirely, because when WB became CW, my DVR lost track of it and didn't record it.)
I don't watch much TV. Most of it is crap. But what I do like tends to have a running story, and I end up getting it on DVD as well. The problem is that I don't always feel like sitting down in front of the TV to watch. This solves that problem.
There has been a lot of criticism of the iPhone by tech journalists and the like, but clearly if you focus on what it does do, it does it well. And if you're a general non-tech consumer, it's the best piece of electronics you've ever owned.