Well, I gave up on getting an iPhone 3G today, but my lovely wife Scarlet didn't. She called up the Valley Fair Apple store and they still had some. Clearly Apple has managed to prepare for the launch better than AT&T.
For the most part, the new phone isn't really that distinguishable from its older counterpart. It's a little bit lighter, and the 3G network is noticeably faster. The bad news is that in my house, the phone only gets EDGE (well, it really gets WiFi, of course, but if I disable WiFi for testing, I get no 3G coverage).
The GPS functionality works well. As long as you're outside (and in some cases, inside) you get a blue dot on the map that follows you around. Unfortunately, Apple didn't turn the google maps app into a full GPS turn-by-turn app. The official excuse is that the GPS receiver isn't "good enough" to properly deliver turn-by-turn navigation. I still don't know why Apple didn't go with a bluetooth GPS solution. The receiver could be plugged into a car's power jack (remember when they were called cigarette lighters?) and basically left there. But as it is, the GPS functionality that is there is an improvement. At my parent's house on Point Loma in San Diego, the old phone always decided that we were near Lindbergh Field in downtown (an error of over 5 miles and across two bodies of water).
I still would not have bothered with the upgrade if it wasn't for the broken screen. The only appreciable difference between the two generations is the 3G networking and GPS. The rest of the updates were in the 2.0 firmware, which means they're available for users of both models.
I've bought a few things from the App store so far: ICE, which is a small app intended for emergency responders who find you unconscious (say, laying near a set of railroad tracks), and check your phone to see if there are any clues as to who you are. The icon is a giant red cross in a white field, labeled "ICE," which means "in case of emergency." At $1, the price is right.
I also fetched the PayPal app, the AIM app, Remote, and I bought the Apple Texas Hold'Em game. I also bought Bejeweled 2 for my wife's phone. The Texas Hold'Em game is beautiful and functional, but the AI for the computer player is rather annoying. They tend to be calling stations.