Just when I had almost convinced myself to pick up an iPhone, I stumbled across this acticle: http://www.appleinsider.com/articles/08/02/06/att_plans_3g_expansion_ahead_of_second_gen_iphone.html. It turns out that the current iPhone only works with the 2.5G AT&T network (EDGE I believe it's called). Apple is going to soon release a new version of the iPhone that can connect to the 3G network that AT&T claims to be country-wide by the end of the year. 200K versus 1MB is a big enough difference to wait for. I guess that shows why they keep new product development under such tight secrecy, or you would constantly have 1/2 your potential customers waiting for the next version.
I need to next research how the broadband part of the iPhone works. I have a sprint card integrated in my new laptop and if I could simply replace that with an AT&T card and "share" the account across the two devices then I can save some $$. If you already know the story here please let me know.
UPDATE: Recent press says June '08 for the 3G iPhone. Only 3-4 more months to wait...