The WiFi location service is based on SkyHook wireless. Will King, guy behind opengeo.net was at BOCC telling us all about it.
My other half tried to ditch the 1st gen iPhone and move to a HTC Touch Diamond last week and lasted less than a weekend. The touchscreens on a lot of other devices, like the Diamond, are not as responsive (the iPhone screen uses capacitance not resistance which is why the iphone works witha finger and not with a stylus or fingernail)
That said, as was featured in EDGE this week, using fingers to control intricate games is hard – like trying to play a PSP with mittens on.
The Super Monkey Ball and Moto Racer ports are great though. There’s a lot of very smooth OpenGL renders going on in there. It may not be the JesusPhone for you – but it should raise the bar out there.