Friends of mine have the Treo and some are keeping their Treo while others are switching to the iPhone. Depends on how often you use the 3rd party software on the Treo. My friends who use the Treo software DAILY are not switching as the iPhone doesn't have enough features for their taste. But, the ones who just need email, text, and phone stuff are eager to switch.
That's the rub. Here's the crazy thing. Most of what people use their "apps" for, iPhone has gaggles of web apps for, even within two weeks of launch. At a certain point I think its extremely provocative to realize that from cookbooks, to scriptures, to fitness apps, to more... Safari's web apps are really going to put things into perspective, especially as most will all be FREE. For instance, I'm still working on my own launcher, but Mojits and AppMarks are pretty nice for finding things on the iPhone, and the apps are just getting better and better. Apps like BeeJive completely take it to another level, and I think it will begin making most Treo 3rd party software users think differently over time. The other night, I used the Web VNC client to visually control my Windows computer, and I was damn impressed. If I could set it to remember my login, and not mirror the screen, but just send discrete commands or launch scripts... I'd be a happy camper.
There's a whole collection of things I'll simply never care that much to do with my iPhone that things like the Treo do with some software (like using it as a modem or something). Everything else just seems a matter of time or is already here. I imagine companies like Intuit (Quicken,Turbo Tax) are already readying secure iPhone-based services, if they're smart... to rival the "install based" services they've begun creating for WM and Blackberries. Why wouldn't they? Either web 2.0 has legs or it doesn't.
I have yet to see the Treo crash in several months of my co-workers using it.
This comment made me laugh. Regarding the crashing, everyone I know that has a Treo complains of it CRASHING all the time. You say you've never seen a co-workers Treo crash. The same person I work with, that told me their Treo crashes a LOT... I see him and his Treo everyday, I never see it crashed. Draw your own conclusions. Maybe he's just a liar?

(Or, I clearly don't sit over his shoulder all day...) He also sounded disturbed when I told him the cost of my plan, and how I got 200 SMS. If I'd shown him BeeJive, he'd be pissed.
The thing that strikes me as an uphill battle with the iPhone, are the people that don't quite realize how its vastly changing the game. They keep thinking they need a "3rd party app" to download and install, but the truth is... they totally don't. They just need to find the right iPhone games or applications for their taste, and/or wait/complain for them to be written until they are.
~ CB