I have the iPhone 3G.
If you will use the internet features (email, web browsing, etc.) features a lot, it'll be the best phone you've ever had.
It is amazing, and blows any other phone out of the water. The interface and touch screen system is also leagues ahead of any other 'touch screen' phone out there (thanks in part to a ton of patents that Apple has).
If you regularly use bluetooth for anything other than a headset, or use MMS picture messages a lot, or like to forward text messages, you'll be disappointed.
I recommend you try one in an O2 or Apple store.