Although I've not been an Apple guy for many years (did have one of the original Macs, though) I have a laptop and a Nokia Smartphone. Like the iPhone, the Nokia smartphone can perform most tasks - read, edit, originate MS Office documents, web browsing, email and so on. So, before I got my iPad, I was asking myself the same questions. From my perspective, though, it's the iPad's larger screen that is the real reason I bought one. Sure, I can do almost anything on my Nokia, but it's difficult to edit or display a Word document or PowerPoint presentation on such a small screen.
I have a very small Vaio P laptop but, again, the screen is too small. So - for me - it was the screen size and the great battery life.
But it may well be that if you don't need to edit Office documents and don't need to web surf too much then the iPhone would be more than adequate.
I'll be interested to see what other members think. I'm sort of considering going the other way - i.e. replacing my Nokia N95 with an iPhone...
Tim
Scotland