So no 3G iphone, same slow service and you have to pay $20 to get the software upgrade.
Sounds like Apple is starting to nickel and dime the faithful.
This was not the year for iPhone 2.0... while Kevin already mentioned that the update is free... there are several of those "wouldn't it be cool if" features that were not included or implemented that usually boil down to two major reasons: Battery Life & Bandwidth.
DoCoMo (which is Japan's cell phone thing) has quietly announced that the iPhone is coming next year... which translates to the 3G (3G = It's faster) phone will be coming next year as DoCoMo is all 3G (this is also part of similar rumors that iPhone comes to mainland Europe next year)* The English translation... the 3G iPhone will be next year at just about the time the early adopters all ran out and got the phone... when their initial 2 year contract will start to fizzle.
Also expect a tiered level of Internet access... 3G access will probably cost $40 instead of $20... this is a AT&T thing, not an Apple thing.
Stuff like Flash and Java for mobile Safari are again an AT&T thing, because things like Dis Radio use that to stream the music, which is a battery & bandwidth killer (I usually listen to The Dis Podcast via iPhone, by clicking on the mp3 file while driving, and that eats battery fast.
Regardless of those limitations... the iPhone is still Uber Cool... not just because one gave Pete a hot crotch... but because I can check disboards while driving up I75 at 80mph in rush hour, while brewing coffee, doing my hair, changing into a fresh outfit, biding on ebay, and doing my tai chi work out... all this while weaving in and out of traffic. My mom has always said the best theme park thrill ride is the passenger seat of my sports sedan.