I didn't want a 3GS, but now that I have one (my wifes phone died so she went and got an iPhone 3GS which I promptly stold from her... with her blessing) and I am impressed with it.
The upgrade to it didn't make sense, but will make better sense when the 3.1 software is released and you can do all these augmented reality type things like this Dishpointer application which requires the compass in the 3GS to work.
Whats nice about the way we are setup now, is my iPhone 3G will be eligible fr upgrade next year, so will upgrade then... then after that the 3GS will be eligible for the next upgrade... so I can always stay on top of technology.