Apps:
DoBot ToDos (rarely use it)
Amazon.com (use it *all* the time)
Sportacular (during Football season, I use it a lot)
G-Spot (rarely use it)
Level (surprisingly useful)
GPS Kit (rarely use it)
Pandora (Fantastic)
Public Radio (Fantastic)
CubeCheater (solves Rubik's Cubes - amazing demo of iphone + math = winner)
Shazam (Not really useful, but fun for showing off an iphone)
Games:
Spore (fun, but it gets old quickly)
Enigmo (great little game)
iShoot (nice little time waster)
Sol Free (it's solitaire, nuff' said)
Lux Touch (sort of like Risk)
S.deadbeef (side-scroller shooter)
FieldRunners (tower defense)
Topple (like Tetris, but better)
FlightControl <--- Most addictive game yet for the iPhone, I think. My current time-waster du jour.
I've downloaded many more over the past couple of years, but these have found permanent residence on my iPhone. And yes, I love my iPhone (both of them, my wife now uses my old v1 8GB). I've had dozens of PDA's and PDA-phones, from the original Palm Pilot, Psion's, Sony Palm's, PPC2000, PPC2002, WindowsMobile, Zaurus Linux, Tero's, Blackberry's, Nokia's, etc. All had +'s and -'s. But the iPhone is, by a long shot, the best of the bunch.
