The emerging consensus is that iPhone 2.0 is a big, painful beta program. The real release will be iPhone 2.1.
Truthfully, my main pains with iPhone 2.0 have been the optional MobileMe (even if it worked it would be bad) and missing PDA (Palm) functionality. The rest of it has been good enough, and the apps I've installed have worked. I do reboot nightly.
So I'd say iPhone 2.0 is incomplete, but roadworthy if you're ok with GPS and a faster version of iPhone 1.0 (at a far higher cost for AT&T customers mind you).
MobileMe, on the other hand, reminds me of iMovie '08 and 10.5.0 -- an interesting product born 6 months premature.
By contrast, we have Google. Gmail is still beta (look top left at logo), years after it reached a level of reliability Apple rarely achieves.
I think we need to retire the word "beta". It's become meaningless.