I thought the pricing was outrageous so I didn't get one, and didn't expect to get one, but then they just had to knock $200 off of it! I got one and it's my absolute favorite phone... ever. I absolutely hate AT&T (I find myself getting "no service" more than I have on any other phone... ever) but I love the phone so much! It sucks.
To answer some of the above posts questions: I've dropped my phone twice and it has only gotten a few dinks in the aluminum which is, naturally, easy to dink. Other than that it has never broken on me. I'm not sure where you got that idea from. It's actually so sleek I find it sliding everywhere when I drop it instead of hitting, bouncing, and breaking like other phones.
The iPhone is exclusive with AT&T. Apple signed (unfortunately) a 5 year contract with them. I'm hoping they'll branch out in the next few years and pop up with other carriers with slight cosmetic differences (just like BB does).
The iPhone and iPod touch are completely different... one's a phone, one's an iPod. Which do you want? It would be ridiculous to buy a phone if you don't use it as a phone, so if you're looking for an iPod, get the touch. I've played with the iPod Touch and it's exactly like the iPhone only slimmer and lacking the phone features.
If you buy the iPhone and don't set it up for AT&T, I'm fairly certain you can still play with the phone. The only thing that won't work is the browser (you'll have to use it like a wifi browser) and the phone features. Just get an iTouch though. Seriously, it's silly to get an iPhone now if you don't want a phone!
I think the iPhone pretty much has everything the iTouch has. The iTouch may have a few games (I really don't remember and don't feel like going to Apple's website to read) becuase all the iPods had games in them, but that's about it.