The BBS ate my response. Again.
Once again, summarizing my nicely composed post:
The keynote said nothing about persistent storage. The example application did not have it's own icon, and did not cache any data locally. Steve mentioned that there was no deployment process, implying that local storage wasn't coming either.
Some apps that can't be a web page: VOIP, Call Recorder, Navigation, Delicious Library remote.
Apple obiously has an internal SDK, even if it's not safe. Saying "we don't know how to develop a secure operating system for a mobile device" is the saddest cop out coming from Apple. "Not yet" would have been a valid answer. "Web 2.0" is not.
Maybe the iPod lovers will love the iPhone, but they're not going to convert a lot of current smart phone owners.
Matthew