I signed up at launch w/ my fiance--we both switched from T-Mobile to AT&T at our local Apple store. Looking back, we've had zero issues w/ AT&T except w/ getting my FAN discount put back in after several iPhone exchanges.
I purchased a black one that has been exchanged a total of six times; my fiance is still in her first and it has had no issues.
Across all six iPhones, I can say that they all shared pretty good reception (3G, especially here in LA), battery life, and call quality. The speakerphone has been particularly good and I've been told a few times by people I've talked to that they can't tell the difference between the speakerphone and handset, but they can tell when I'm on a Bluetooth headset. That's pretty crazy.
Quality-wise, I think they've had a few "bugs" to iron out, mostly software and Quality Control. However, you can't look at the hardware issues as one mistake, but a one mistake that has been duplicated hundreds or thousands of times (depending on the production) until the issue is discovered.
Phone #1 - Pitted/peeling chrome bezel (bottom/left)
Phone #2 - Backlight is slightly dim, leaking between glass and bezel on the left side (next to volume switch)
Phone #3 - Pitted chrome, otherwise OK. Was fried by a defective USB dock cable.
Phone #4 - No cosmetic issues. Phone would "skip" when playing music through the iPod application if I had it hooked up to my car's AUX jack w/ double-ended audio cable, or w/ third-party headphones.
Phone #5 - I had it for two weeks until it "fried" the SIM card all of a sudden. I took the phone out of my pocket and noticed that it said, "NO SIM INSTALLED" and despite power cycling and removing/re-inserting the SIM card, it was just dead.
Phone #6 - Current phone. No issues (knock on wood), cosmetic or otherwise.
All of the above phones were in mint condition when I brought them back, no scratches, scuffs, or otherwise; none were dropped or otherwise abused either.
To Apple's credit (at least the store), they were very forthcoming in trying to resolve my iPhone issues. However, I had dealt almost exclusively with the store management (NOT the Genius Bar), and they were very accommodating. In fact, I called the Store Mgr about the fried SIM card early in the afternoon and he had another phone waiting for me when I come in after work. I absolutely refuse to deal w/ the Genius Bar unless it's something I can afford to wait a day or two for, and so far Apple has been understanding of that (esp. w/ the fried SIM card).
I love the iPhone and especially love the "freedom" it gives me from my desktop and/or laptop. The reception is absolutely stellar in comparison to my last phone (Nokia 6133) and the only reason I have a "smart" phone. I didn't like the look of Blackberry or Windows Mobile devices (esp. the QWERTY keys on the front). The Blackberry looks like something either a businessman or a gadget "nerd" (not Geek) would carry; the iPhone is much more inviting and easy to use, so if I didn't have it I'd probably have just gotten a freebie camera phone from AT&T or Verizon.
Battery life is no different than my trusty old Nokia 6600 (circa 2006), which was the love of my life for a good two years and had stellar reception, but at the expense of battery life. The battery lasts me a good day or two, depending on how much 3G or GPS I use. I charge mine every night, and the battery is usually at 40% or less (depending on how much talking). For instance, I had to call AT&T @ 611 to resolve an issue w/ my FAN discount, and I was on the phone for 45min--to AT&T's credit, I was on hold for maybe 5min total and the rest was Q-and-A about reception in my area. Anyway, my battery life hadn't moved at all, and about 4 hours later (of non-usage) that the indicator hadn't moved but 1-2% down. In other words, the talk and standby time are really good, but the GPS and 3G are really what will "eat" your battery quick.
Integration with the App Store has been excellent, but at times it is hit-and-miss (esp. w/ updates). I update almost exclusively from the handset (not from iTunes) b/c I've noticed conflicts when doing it the other way around. iTunes works fine but you need to be on WiFi if you want to purchase any tunes straight from the handset. So far the best "app" I've found is Pandora, and it functions wonderfully when you are driving and have it hooked up to your stereo--streaming over 3G is excellent.
On the whole, and 6 iPhones later, I can say that I've been very happy w/ my iPhone 3G. I would recommend it purely as a "smart" phone for the rest of us--those who don't use Blackberries or Windows Mobile devices, or prefer not to have a waffle of keys on the front of our phones either. So far it's done everything it says it will do, and I've had a good (but not great) experience with the iPhone.
If anyone was looking to get one now, i think you'd be fine...most of the issues I had were cosmetic, but rarely anything to do with the function of the phone.