Imo the price is not that bad, I mean, I won't be buying it for sure but I don't think that the iPhone is that expensive for what you get.
It's funny watching everyone talking about 3G like it's "THE BEST THING EVER" when I live in a country (Portugal) that has 3G heavily implemented and almost everyone owns a 3G phone already.
Do you know how many times I've seen people video calling and/or browsing the web with it? NONE! Not a single time in the last 4/5 years I've seen a stranger, friend, business man take out his 3G smartphone and actually do something out of the ordinary with it.
However, I see everyone with mp3 players.. and that's what the iPhone is offering that's different from the competitors, a good phone/mp3 player.
This Phone offers a new touch screen interface, beautifully designed BTW! It has the best MP3 player UI I've ever seen, it plays video, it has 4 or 8GB base (you don't need to buy extra SD cards, which sucks, it's like the PSP, sold with a 32 MB card, WTF?) and, being an Apple product, it can give you the guarantee of perfect sync with your Mac or PC!
It has all that technology embedded, widgets, google maps, wtf? what more do you want? a typewriter attached?

And how many times must we say this?? The iPhone WILL have 3rd party apps! The only difference is that these apps will be controlled by Apple to make sure that they don't f*ck up your experience as a customer or ruin the product.
It lacks 3G, but seriously, I couldn't give a rat's @ss for video calling or web-browsing except when I'm at home where I have my iMac sharing WI-Fi anyway.
I work in web design and sometimes it's my job to update mobile phone websites to the newest products, I see phones which are a mess in terms of UI and overall much worse than the iPhone being sold for 700/800/900 and I think "How can people say that the iPhone is expensive??"
Apple is and will always be a premium product company, they're not forcing you to buy it, although I can put money on the table that all of you who are constantly complaining about a (yet) unreleased product will all own it in 2/3 years, just like the iPod. At first everyone was complaining and calling it a flop and right now... look at the mp3 market numbers and to the previous nay-sayers opinion, that's a 180° turn...
my 2 cents.
PS - I won't buy the iPhone until an iPhone Nano comes out, it's way too big for my usage.