iPhone 2.0 software delivers 80% or more of the value of the new iPhone HW. I know uber geeks will need the HW upgrade too. They can’t take the embarassment of being seen with an iPhone with a metal back. (Hint: put it in a case. Nobody will know.)
The new HW offers some peachy improvements: faster network, more accurate location finding, improved sound (kind of important in a phone). There's a rude awakening though, folks are discovering that running all those new radios will give you shorter battery life than the first gen iPhone.
The truly revolutionary advances are available through a software upgrade: App store… push notifications… MS Exchange integration… Enterprise IT support… push synchronization with PC’s and Macs… and above all an SDK and developer program. (memo to self: come back and translate this paragraph to human readable language.)
As someone in Redmond said quite famously: “developers! developers! developers!
Mickeleh's Take: If you don’t have iPhone yet, the new total value proposition should give you plenty of reasons to consider.
If you have a first gen… you really don’t NEED the upgrade except to meet irrational urges. (But if it weren’t for irrational urges, life would be pretty dull.)