Is that the price of an unlocked, unbranded E62?
It's personal preference. I wouldn't want a phone that size unless it had some really great things going for it, which it does, but wifi is one of the biggest to me. The ability to browse the internet at speeds faster than EDGE provides, VOIP, and another connectivity option are all things that appeal to me. Wifi can also be used in place of a data plan for some (not me).
If I were a Cingular customer, then I would look a lot harder at the E62. After discounts and rebates it comes to $100 with a two year contract, which I think is a really good deal. At $220 I would rather spend $20 more to get an unbranded E50. Every phone has quirks.