My personal prediction is that the iPhone will SELL great, but that there will be a high return rate, and an equally high damage rate.
Return - I think that it's got the sex appeal for sure. People will spend on it just like they did the RAZR, which if you'll recall debuted at the same price point half a decade ago. But I think the honeymoon will end quickly when they try to use it. I would think people will get it expecting it to be all that, but then realize that it's a bit confusing, even with the UI, and will return it for something else with iTunes, if that's waht they got it for.
Damage - we in the States are brutal on our phones. Plus, the touchscreen won't last. I think it was Zerilos in some other thread that pointed out that those who carry touch-screen devices now have done so for years. They're the people who used to carry a phone AND a PDA, and are now able to carry just one. They've been there and know how to care for a touchscreen, they know about screen protectors and how not to press too hard all the time and not to put it in your pocket with your keys and things like that. The general population doesn't, and I can foresee that being a downfall.
Other than that, I think it's going to bomb out for the same reasons others do. No 3G is the big killer. Personally, I think it's unbelievably irresponsible of CINGULAR to allow a phone this hot to come out on their network anymore.
In the past 18 months, think how much money they have poured into 3G build-out. They just announced a few weeks ago, very proudly, that they've got it live in 160 markets, and now they allow the hottest phone of the year (only in buzz. I don't think it'll be the hot seller of the year) to come out and not take advantage of that network?
I realize that Jobs stated 3G is coming, but I personally don't foresee that coming on this model, and I don't believe that's a simple software update to support it. I think there's going to have to be a 2nd iPhone with 3G.
That being said, I personally would rather get a Nokia N-Series like the N91. Not the same storage capacity (well, the N91 does, but the others don't) but for MUCH cheaper, they do SO much more. If the iPhone was about $100 cheaper and had 3G, I'd give it a more serious look.