I think AT&T forces you to have a data plan, but I can't imagine not having it. I use it to look up phone numbers, driving directions, restaurant info, check the price of something on amazon.com before I buy it at Best Buy... SO much and I don't even use all of my apps. I love the Facebook app though

And Flickr and the weather apps. You can check radar if you are caught out in the rain. I have a "Tuner" app so I can play any am/fm radio station that has a stream online (most do) with no static. We can plug it into our radio in the car too. You can use it to track your diet, find movie times, look up coupons *Yowza!!* um... track your menstrual cycles (not kidding! helpful for those trying to have a baby) shopping lists, schedule my DVR on DirecTV... look up recipes.......
You can use it with or without a data plan on T-Mobile, even on T-Mo pre-paid, but you have to be a geek to do this because you have to hack the phone to make it work. (If you don't have a data plan the internet/apps work only on WiFi - an option if you have wi-fi at home/work/school.)
If you already have AT&T, get the $199 iPhone 3GS with the better camera and video camera. It's WAY faster than the first gen iPhone (pre-3G) and you'll use it for more than email! I guess the way to think about it is - do you look things up on the internet at home? Like do you google movie times and recipes for dinner and look at the radar? If so, you'll do the same on your iPhone.
Here, I took this with the video camera:
http://www.youtube.com/user/yorkiemi.../0/1L5ngBalrZY
It does better outside and in good light. It doesn't work in low light because it doesn't have a flash. But it works fine if you are out in the car with no camera and want to take a pic.