Those are great pictures heart attacked!
My experience is similar. If you are looking for a digital camera replacement in the iPhone, you'll be disappointed. If you're looking for something that can take a good quality photo when you've left your regular camera at home, you'll find the iPhone camera to be quite usable. While I wouldn't depend on the iPhone camera for taking my main vacation photos, I would use it for a fill-in picture or two.
Res is 1600x1200, and you simply download them to iPhoto on your Mac. If you're doing this on a Windows machine, you'll need to look for specific instructions. Also, if you don't use iPhoto, you'll need to look for alternative instructions. A good starting point is to download the full user guide for the iPhone from the Apple web site.
If you mail a photo from the iPhone, you'll only send a 640x480 image. You have no other size option as far as I know. It was probably done for bandwidth, given the EDGE network, but I'd still prefer the option of sending a full res image.