I've had a rubber skin on my 3G since the day I bought it and wouldn't have one without it. Does nothing to limit the functionality and sure helps when you drop it like I have...more than once!
Yeah, I've got a low-end cheap LG/Verizon phone (VX5500 series) that I love, but it slid out of my shirt pocked and landed in the driveway once too often, so for $5 I bought it a nice custom-fitted condom that keeps it from sliding around so much.
I can't believe Apple didn't coat the metal in the first place. Probably an aesthetic consideration, and in this case, the aesthetics caused an awful lot of bad press and unhappy customers.