The iphone has a ton of brand equity behind it. For anything with hopes to be an iphone killer, the company will have to own the OS, the hardware, be able to pump out updates, etc. Oh and have something along the lines of an itune store available.
This is why any new WM phone, G1, you name it has failed in that regard.
The Pre closes the gap in just about meeting the requirements. For what it lacks in an itunes store, it more than makes up with the hardware and OS.
It's about appealing to the simple masses and having ease of use though. I do think the Pre will have a greater learning curve for new users. And the masses want audio, video, browser, text.
Palm has to show it does all that and more. Start out with music, video, browser, then bring it home by really pushing the multitasking, live cards, etc.
If i was palm, i'd go right at apple. It's what apple did to microsoft.