It's alive! I know I missed the best part - all the excitment of waiting in front of an Apple store for hours - the community, the comeraderie and the whole feel-good about a joint experience - especially not being able to connect to the servers to activate your phone. I created my own thrill downloading the 2.0 Firmware one day early when few people were activating their phones - and yes it works; it is no longer the latest and greatest but it is great enough and 3G will get to mee soon, maybe after the motherboard got one more rev.
So yes, it's obsolete and I got those looks from people - "Have you got a 3G?" - mostly people who live on "free" phones from their company.
I did not read all the reviews but from what I saw, the firmware update is much more valuable than the new hardware clunker.