@Chad H
Almost every phone may *do* email, but how many people can be bothered to set it up? Or register yet another unmemorable email address so their network will "support" their email usage? Compare that with *every* phone that does SMS and virtually every phone that can do MMS (the iPhone being a notable exception, of course).
SMS and MMS for me cost nothing - they're included on my tariff. No limits, other than a "fair usage" limit of around 2000 messages per month per number.
Plus when I'm away from a wireless access point (which would be most of the time I'm not on a computer - it's supposedly a 'mobile' phone after all), web browsing isn't the crap 2.5G experience that iPhone users are lumbered with. You might have an unlimited data tariff, but how much data can you actually shift without falling asleep on EDGE (assuming you're in an area covered by it, which is still way less than 3G coverage)?
I got my N95 several months ago, for free, and my total monthly contract bill is £32.50 - including a 120MB data allowance (not a huge amount but it's enough for web browsing, live GPS map data, Remote Desktop through a laptop, and the occassional song download). The deals are there if you push hard enough, but they aren't there for the iPhone because CPW and O2 can't budge on what they're allowed to offer.
Maybe iPhone version 2 will sort out most of the problems, but it seems more likely from past Apple efforts that version 2 will sort out some, and then they can skin all the fanboys again with version 3.