The way I'm looking at justifying the cost is the following:
I think that eventually Apple will release a new iPod that is very similar, ie 3.5" widescreen that will be about 30 or 60Gb and cost around $300 minimum. So if you said to yourself that you'd buy this for $300, would it not be worth it to you to add $100 to this cost and combine your phone into this device so you can carry around one less gadget? Then ask yourself if you'd pay another $100 for all its internet capabilities (albeit slow). You are now at the iPhone's $500. Now the obvious difference of course is that with this iPhone you are getting much much less than 30 or 60Gb but I guess it depends on your viewing habits and how much you really need to store on your device at one time. I guess I imagine myself customizing my iPhone's video content pretty regularly.
My .02
I think that eventually Apple will release a new iPod that is very similar, ie 3.5" widescreen that will be about 30 or 60Gb and cost around $300 minimum. So if you said to yourself that you'd buy this for $300, would it not be worth it to you to add $100 to this cost and combine your phone into this device so you can carry around one less gadget? Then ask yourself if you'd pay another $100 for all its internet capabilities (albeit slow). You are now at the iPhone's $500. Now the obvious difference of course is that with this iPhone you are getting much much less than 30 or 60Gb but I guess it depends on your viewing habits and how much you really need to store on your device at one time. I guess I imagine myself customizing my iPhone's video content pretty regularly.
My .02
