Depends what you're after.
Apps on the iPhone are great - but if you're just after the Apps and a phone, then it may be recommended to buy an iPod Touch and a cheap phone with it. The iPod Touch is around 1/2 the price and can have nearly all the apps that an iPhone can - excluding ones that are camera and phone related.
If you want a phone with a good camera, general applications and memory. You may wanna have a look around. The HTC HT2, the Nokia N97, the Sony Ericsson Sation and the upcoming Sony Ericsson X10 or the Google Nexus One are the best alternatives with generally higher megapixel count around 8-12 megapixels, some main applications, large memory storage and good video/phone services.