This would be my first iPhone and the video capture and upload to MobileMe is a real plus. It'll make catching and uploading little snippets of baby thrice easy and awesome.
It doesn't seem like that minor an upgrade from the original 3G... added a compass, video better camera, voice control, faster processing and double the capacity at the same price-points. I can see how it wouldn't be worth it upgrading from the current 3G though.