3:2 rant (this is strangely familiar)
I'm sure I responded to a post like this before.
The iPhone (and various early Android phone)'s 3:2 aspect is, indeed, not a perfect match for 16:9 content. This is, in part, because 16:9 is a stupid ratio that doesn't divide nicely into anything that gives multiple of obvious size rendering blocks - it's a standard from an analogue age, where niceties such as powers of two in pixel counts didn't matter.
A better reason for it is that 16:9 is a terrible ratio for doing anything other than video which originated in 16:9 (or wider) format. If all you do on your iPhone is watch videos, paying for the black bars probably bugs you, and one of the 854x480 Android phones would be better (in addition to having the right vertical resolution for NTSC; 1138x640 would actually look worse).
If you want to edit documents, surf the web, etc. a squarer aspect ratio is generally considered to be much better - they just give you more screen area per unit diagonal, which is why monitor manufacturers are trying to push 16:9 panels on the public instead of the more traditional 5:4, 4:3 and 16:10. (Many of these monitors can't run HD video at 1:1, which removes their sole potential redeeming feature. Don't get me started on 1366x768.) 3:2 is also the perfect ratio for displaying images from most DSLRs - hence the 720x480 screens on some Canons.
960 pixels is a relatively small jump over the 800 of my current phone. I'm a lot more excited over the idea of 640 pixels of height compared with 480. However, not excited enough to go down the Apple route - I'm just hoping that Android phones get equivalent displays soon. Preferably with an integrated projector, too. (Samsung? Where's the Beam?)
In other news:
"Samsung says that this will be marginally less sharp than the iPhone 4 even though the pixel density is far lower - the difference, it says, will be three to five per cent, scarcely visible to users"
I (as a potential purchaser) will be the judge of that. Because nobody ever wanted an XGA display when SVGA screens were the norm, after all. I can sure as hell tell the PenTile AMOLED displays in the Nexus One and Desire from the "real" WVGA screen in my Touch Pro 2. I'll be in the market for a phone as soon as there's an Android device with a decent touch screen (sadly, this rules out the Droid/Milestone) and a screen at least WVGA that's not PenTile. But if there's something higher resolution coming, I won't grab an Evo just yet.
Either way, having black bars when watching video isn't my primary concern. I've got a TV for that, and its battery doesn't got flat.