As a smart device, I don't think there's a better one on the market than the iPhone.
As a phone, it sucks eggs. Both of mine, and the two my employees have, drop calls constantly. I never had that problem with my three other AT&T phones. Nor did my employees have that happen on their Blackberrys. Thinking it was AT&Ts 3G network,I used the phone for several weeks on the Edge network: still dropped calls.
The phone is also much weaker than the Razrs and Sony were....it took me a couple weeks to realize all the spots in my work and home high-rises where my other phones worked but the iPhone won't.
Also, getting in and out of elevators, and walking around building cores, causes the phone to get confused with dropping and reconnecting to the network: necessitating a hard boot every couple days.
While it's the best at everything else, it's a crap phone. Total crap. I'd get something else if it weren't so good at non-phone applications.
Hmmm... Maybe an upgrade to the iPhone 4 will help? After all, it only drops more calls than your current 3GS...;)
Get an iTouch and a real cell phone then. That would give you what you want/need. Or get an android or windows mobile that will allow you setup wifi on the device as a wifi hotspot connecting your other devices to the 3g network. So you can still get your iTouch 3g service via your android or windows mobile.