I'm not going to bother arguing in this thread, but I'll say that those who say it doesn't do enough or it's just a big iPhone really don't understand the product at all. Which is completely understandable since this is a new device category. It's not a laptop replacement. It's not a netbook competitor. A netbook is just a smallform laptop.
And it's not just a bigger iPhone. The iPhone has so many limitations because of it's size alone. If you looked at the apps in the demo, you'll realize that the iPhone is more of a shrunk down/limited version of the iPad. They are able to add so much more functionality and power into the iPad apps. The iWork suite was a great example of software that people would normally expect out of desktop-grade software on what is basically a mobile device. The iWork suite would never happen (at least not nearly at that scale) on the iPhone.
This article really sums up how I think about the initial reaction on the web:
A message to the Internets regarding the iPad:
http://cruftbox.com/blog/archives/001592.html#001592
And this is a great article on why we probably won't see Flash on the iPhone/iPad (which I think is a good thing):
Apple, Adobe, and Flash:
http://daringfireball.net/2010/01/apple_adobe_flash