"Hey, let's take a device spinning several thousand revolutions per minute and put it in a pocket. GREAT IDEA ISN'T IT??"
I've got an iPod Nano and an iPod Shuffle that I'm very happy with, because I know I can abuse the fuck out of them and not worry about them flaking out. I don't have the time or patience to have to baby something with an HD in it.
and as much shit as I talk about the iPhone, if they made a version without the phone functionality, just iPod / PDA / WiFi with a stylus and HWR, I'd probably get one. Not at the iPhone's price, of course, but something like that would interest me.