Gadget Addict

1. The iPhone is simply the iTouch, with some extra features. You get a phone, a camera, a microphone, and 3G. If all you really wanted was the iPhone's UI (User Interface, or what the phone looks like when you turn it on, and how you use it, etc.), just do as i did, and get a nice iTouch and a cell phone.

2. The iPhone is no longer the best smartphone out there, as it is now competing with the Motorola Droid (which I own). The Droid is superior in some aspects. It has a physical keyboard and the virtual keyboard. It has a much bigger screen with many more pixels (so you see more, and images are crisper, and websites are easier to read, etc.). However, Apple's App Store is one of the most attractive things about the iPhone, with more than 100,000 apps available for purchase/download, Apple is appealing to every potential iPhone user. Nevertheless, Android (the software running the Droid) has its own Marketplace (its version of the App Store), complete with more than 10,000 apps, which isn't too bad considering how much longer the iPhone has been out. The Droid also has a stunning camera (5 megapixels), complete with 2 LED flash, and video capabilities, which is way better than what iPhone has to offer. Both play games, and both have accelerometers.
The Droid is also a lot better for social networking. You will get a notification (like a text message, except not) when anything important happens on Facebook, Google Talk, or if you get EMail.
The Droid is also the first phone which runs Google Maps Navigation, which acts as a GPS.

3.AT&T vs. Verizon
AT&T has horrible coverage compared to Verizon. My dad has the iPhone, and he rarely gets full reception, whereas I (Verizon w/ Droid) rarely *don't* have full coverage. If you live in a metropolitan area, you should be fine, but with Verizon, there are many less chances to lose coverage.

I personally love the Droid, and the iPhone as toys, but only the Droid as an actual phone. Hope my review helps!