About a week ago I signed up for the $99 iPhone Developer Program. Since then I have been focused on learning Objective-C and Cocoa, but I finally managed to update my iPhone to the 2.0 beta (aka iPhone version 1.2). There really isn't that much different from the most recent version. The calculator has a scientific mode (pretty awesome), exchange is supported (I don't have an exchange server to test on), there is a Contact application on the home screen, and the Tunes Store is missing. The main thing I've noticed, though, is that the version is definitely beta quality. It's crashed at least 3 times on me today. I'm contemplating downgrading for regular use, and then switching to 2.0 briefly to test my development software. This is probably a good idea, as I'm at least 2 weeks off from getting anything close to deployable.
Luckily, my worry regarding an inability to use my iPhone as a phone after upgrading was unfounded. Still, the crashes are too numerous for my liking.