The Killer Application in iPhone is Safari
Safari is the web browser supplied by Apple for their computers and for the iPhone.
Steve Jobs probably won't want you to install MSN onto the iPhone. But guess what, you can log on to MSN from Meebo.com! Meebo.com supports MSN, ICQ, Yahoo Messenger and etc! All these chat messengers on the web browser! Yes, you can now be online while you're at Starbucks!
Want to work on your iPhone but can't install the applications you want? Now with Google Docs, you can work on word documents, presentations and even spreadsheets. But you probably won't want to do that on a small screen. But it's possible if you want to!
Say you took a photo with the iPhone. You can fire up Flickr.com and instantly upload your photos onto the the Internet. Yes, instant publication and blogging!
Given the tons of rich Internet applications out there, you can practically do anything with a web browser.
You can download songs from Amazon.com. You can book cinema tickets online. You can find the best Laksa or Hokkien Mee on Google Maps. You can search up anything on Wikipedia. You can stream music from Last.fm.
I can go on and on but I know you got my point.