Yes, I love it. It is literally one of the coolest gadgets I have ever owned, not kidding! Set your Apple-prejudice aside and rejoice with me in my geeky happiness! 
Truthfully, I am not an Apple fanatic. I probably won't ever buy a Mac. One of my favorite hobbies is gaming and not every game I want to try or play has a Mac version, at least not right away. That and I have more experience troubleshooting a PC.
When the iPhone initially came out, I thought the idea was cool but wasn't up for paying the high price of $600, at the time, because I already had an iPod and a workable phone and didn't think I'd have a need to browse the web with such a small screen.
Now that I have a better job, and the price has dropped, I thought I would reward myself. 
My iPhone arrived this past Monday nestled beautifully in a tiny box along with a USB connector, charger, dock, cleaning cloth and quick start booklet. I am positively in love with it, more than I ever thought I would be!
Obviously, the design is gorgeous. The interface is shiny with cute buttons and extremely simple. Oh, and might I add that it's idiot proof. Little old ladies in bifocals could use this gadget! Of course, they'd have to be web savvy little old ladies to a point but seriously, you don't need to flip through a manual at all to get how it works.
Apple doesn't even include the manual in the box, you have to download it from their website. While that might seem unusual, I'm actually glad. When I went to download it I discovered they had a ton of these how-to videos called "Finger Tips" that I think I actually learned a lot more from compared to reading a thick document. No paper manual also means not losing it and saving more trees. Good thing right? ;D
So obviously, I knew I'd be using the phone and the iPod features. But what about the web? Would I really want to browse that often? After finding out that the iPhone supports unlimited web browsing over Wi-Fi and that I could add spiffy web apps to the interface, I can now definitely say YES I will!
My favorite web apps are:
- OneTrip - An interactive color-coded grocery list.
- ThinCloud - Post updates to your Twitter account!
- EarthComber - Locate cool places nearby! Not just for iPhone!
- BarCheck - Enter in a product's barcode and search for reviews/prices!
- iGas - View local gas prices. Quite handy.
Another cool one I just found is the Disney Park Maps app! Haha, sweet! 
It also helps that you can zoom in and out to any website you're viewing with the swish of your fingers. Since the browser is Apple's own Safari, you aren't restricted to "mobile only" websites! You can view any site you want!
With that in mind, I took screenshots of the web homes of some of my fave people:
I can also listen to music and browse the web on it at the same time. If I happen to get a phone call the ringer plays in my headphones and I don't even need to take them out to talk! Then after the call is done, the phone goes right back to playing my song where it left off. Just awesome! The way it "takes care" of things makes me feel like I have a little assistant standing by to attend to my every whim. It spoils me, literally.
Oh yeah, did I happen to mention that you set up the iPhone and activate it's service right from within iTunes?? I was up and making calls within 5 minutes of connecting it to my computer! The whole process was quite revolutionary to me.
One thing I was nervous about overall was the iPhone's durability. I was walking on pins and needles the first few days I had it because of my experience with the iPod getting scratched pretty easily. That mirrored back is nice but it gets really ugly when it's scratched, doesn't it?
However, after reading reviews and watching stress tests I discovered that not only is its glass screen pretty much scratch proof, the entire thing can withstand multiple drops with minimal scratches and no immediate damage! Pretty good!
I guess a negative would be the screen can get smudgy from having to touch it all the time. But since I just received my InvisibleShield for it, I think that problem will go away soon. I remember hearing a lot that the touch screen is something lots of people didn't like but I adore it! It's actually surprisingly accurate and smart and I rarely make typing mistakes at all.
I know my random review doesn't do the iPhone a ton of justice, but I really love it. Overall it's a very leisurely and enjoyable experience to have one and I don't regret buying it one little bit!
Check out this awesome introductory video on the iPhone!
Maybe someday though! They are very sexy. 
I got one about a month ago, and I had the exact same reaction as you - I fell completely in love. The actually usable browser is fantastic - I’ve never actually been able to use internet on any previous phones, since it’s so cumbersome, but with iPhone it’s easy as pie. 
I love it, actually! It’s smarter than I thought it would be and it didn’t take me that long to get used to.
LOL OMG! Hahahahaaa!!
And wow, I can’t believe some of those questions people asked you because it just really wasn’t very hard for me to figure anything out at all! You know it sounds like those people didn’t do any research or read the online manual…at that point they can’t even help themselves. 
The one I have is only 8gb, which is fine for me because I don’t have tons of music. They just came out with a 16gb iPhone though and I’m positive they’re going to keep increasing that number like they did with the iPod.