[jarofclay73]

I disagree that the jump from the 3G to 3G S is the bigger upgrade than the v1 to 3G.

The jump from EDGE to 3G was huge for internet speed. The inclusion of a GPS changed the way we socially network. And the creation of the App Store opened up a huge box of possibilities and has made the iPhone an actual gaming platform.

The main upgrades for the 3G S:
Video camera - nice, but not a must-have.
Voice recognition - with the right app, you can do it on the other iPhones (I use vlingo).
Compass - another convenience feature but not necessary, unless you like to do a lot of Man vs. Wild.
Nike + iPod - mostly for serious runners. I already use Distance Pro for what I do and it's great.
32GB - the one really needed upgrade but I'm not shelling out $399-$499 for the unsubsidized price just for this.

I think next year's iPhone will be the major upgrade with a multi-core processor, video teleconferencing, redesigned backing and possibly even compatibility with a future 4G network that AT&T will be starting up. I'm not sure if a 64GB flash drive that can fit in the iPhone has been produced yet.