Yeah, people forget how revolutionary it was. I bought an iPhone 3G in June 2009. I remember showing it to colleagues and friends, who were in awe about the whole experience. Their phones and smartphones looked primitive next to the iPhone.
This was around the same time the HTC Magic came out, although it was clearly a copy of the iPhone, it was a toy in comparison.
Now that Android has come a long way and even old ladies are carrying iPhones, it looks as if we had modern smartphones for ages :).
The cover flow blew my mind and it quickly became apparent this device was lightyears ahead of anything else on the market.