There is one fundamental flaw with both the iPhone and the iPad. As a user, you do not have full control over your device. You can only install or run software that is approved by Apple.
This is something that is unprecedented. All major platforms, Windows, Linux, Mac OS X do provide the user with full control over what programs can be run or not.
Is this a bad thing? Are you trading your freedom for some luxurious gadget such as the iPhone or the iPad?
I say no. People are over reacting.
You would trade in your freedom and become 'owned' by Apple, if an iPhone or iPad is your sole computing device.
However, everybody also has a computer at home, that is still under your full control.Since the iPhone and iPad is just an auxiliary device (although quite powerful), you are still free.
Most importantly, I think it is about the content, not the device. Do you retain control over your own content, such as music, files and e-mail? I think so. I think that on this level, which is most crucial, Apple does not restrict people on iPhones or iPads in any way. And that is what matters most I think.