It does look nice, but without handling one I'd be hard-pressed to say it looks better than the iPhone. I really prefer the iPhone form factor - thinness is more important to me than width/length. I have to believe this will be less evolved as a media player, and obviously transitioning one's media from iTunes would be a major PIA for most people who use iPhones and/or iPods. Perhaps most critically, it's hard to see how Palm would ever be able to build something like the App Store from scratch, and to me third-party apps are one of the most magical things about the iPhone.
I guess the upshot is that for a professional user who send a lot of e-mails, the Pre might be the better machine due to its physical keyboard, and I concede it's probably superior in some ways from a hardware perspective (those animations look very smooth), but I can't imagine many iPhone users jumping through hoops to switch.