this could actually be a good thing, despite the initial growing pains of not having access to some video content. the iphone could be the proverbial game changer for mobile video content. if it gains critical mass it might force those companies using windows media to switch, or at the very least offer content in both .wmv and .mov like youtube has done.
while the overall market share that the iphone represents will be small, the demographic will be incredibly attractive to content providers.