You're absolutely right. The iPhone can't do "proper" games, as videos like these prove :)

http://www.firemint.com/realracing

http://rolando2.ngmoco.com

http://stardefense.ngmoco.com

http://blimp.craneballs.com

I kinda agree, but not 100%. There are definitely genres the iPhone doesn't lend itself to - beat 'em ups for instance. Other genres that it *can* do very well are racers, puzzlers, physics-based platformers, strategy, even action-RPGs.

First-person shooters remain to be seen, although with ID working on Doom and Ngmoco releasing Livefire it'll be interesting to see.

My favourite gaming handheld is the DS, but I love my iPhone too. I remember doubting that a Zelda or Metroid game could work with a stylus - how wrong can you be!

Hopefully iPhone developers will be able to co-operate and thrash out some kind of "industry standard" for iPhone inputs mapped to joypad etc that can drive third party controllers.

An iPhone with a controller snapped to it would be no more ungainly than a PSPGo...

Apple have announced parental controls for iPhone OS 3.0 (due next week). Developers will be required to rate their own apps.