You guys are lucky in some regards to be getting the Hero a little later than us in the UK - with the v1 software the phone really was quite annoyingly laggy ... and the music app caused stutter at the start of each track constantly. I could easily understand people trying it and turning straight back to the iPhone.
The v2 software really spruces up the phone. I still get the occasional music stutters (which you wouldn't with the iPhone), but only when I've been running lots of apps simultaneously (which you can't with the iPhone) - a quick reboot always solves it.
Dave