I'm not opposed to the idea of an iPhone case in theory but all the ones we've seen so far have been hideous.
Belt clips are impractical - you know the feeling of sitting down with one of those thing attached to you? - and they're like the big scarlet letter of douchebagdom.
I plan on using a simple, soft sleeve for when I'm keeping my iPhone in a pocket, bag, or case with something else (my notebook backpack or a jacket pocket, for instance). Most of the time, though, it gets its own pocket.
A slightly off-topic rant - I don't get people who say "but that'll get scratched up if you put it in your pocket with your keys!" Well don't do it then - you probably have more than one pocket. My iPod is pretty much scratch-free after a year of use, and I never use a case.