It is a smart move to provide the applications and ability to run Slacker on these phones.

However, this just doesn't interest me. When I tried a iPhone when they released the first generation one. I found it very irritating to be listening and receiving a phone call or to need to use the phone for other purposes. I just prefer a separate music player, but that is me.

Now having this on my iPod Touch would be cool even though it will only be streaming. I still think I'll prefer the G2 even over the iPod Touch though because of the fact that the iPhone won't be allowed to cache the songs.

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iPhone 4 32GB, Black, iPad 32GB 3G/WiFi
MacBook Pro 2.27GHz, nVidia 256GB, 4GB Ram, 320 GB HD
Mac Mini (Home) 2.53GHz 4GB Ram, 500GB HD

I'll bet you'll never see songs cached on the iPhone/Touch because in Apple's eyes an application like that would compete with the iPod directly. So far Apple has rejected any apps that cuts into their revenue stream (aka iTunes Store).