Most of the shortcomings that made me return the 1G, 3G, and 3GS are still there, but the killer application that I can’t live without is FaceTime. Skype, Yahoo Chat, MSN Messenger, all have been around for years – video chatting isn’t new, but with FaceTime, Apple does it right. The ability to have a handheld device, press a single button, and be able to share lives across the continent is magical.

From a technical standpoint it’s an engineering marvel. I clearly remember the days when simple actions like AIM Direct Connect would require port forwarding behind routers and often failed. Today, I’m able to video chat, in amazing quality, without a single thought to firewall configuration. If you’re interested in the nitty gritty of how FaceTime really works, check out Packet Stan’s blog, but Apple has managed to use technologies that have existed for years and turned them into something truly magical.

FaceTime technology coupled with the iPhone 4′s superb hardware and software allow crystal clear audio, and not quite HD, but excellent video quality. In fact, with the shoddy AT&T coverage I have my house, I was having 5-6 dropped calls every hour; with FaceTime, I have virtually none. The hardware is so good it picks up whispers and conversations in the other rooms. The software so good, that there are zero ambient noises – it actually sounds as if the person is in the same room.

I was a skeptic when FaceTime first came out, thinking I never video chat on my PC, so why would I care to on my phone? Today I’m a fan – I love it. There is no replacement for seeing someone in person, but for people who have dear ones far away, FaceTime certainly makes the distance seem less.

PS: I’m still an ardent BlackBerry user and can’t live without my BlackBerry. I still believe the BlackBerry experience is unrivaled for work. When compared to an iPhone, for contacts, emails, tasks, and calendars, I firmly believe the Blackberry is a superior device. However, with my new found love of FaceTime, it has been relegated to my daytime phone, and the iPhone is my evening phone. I can’t wait to upgrade to iPhone 5.

iTunes and iPods/iPhones have the ability to remember where in the book you stopped should you pause or disconnect your iPod. This is tremendously useful because I drive different cars and scrolling through a 54 hour long audio book to find my spot is a pain. The catch is this functionality only works on audio books that are in a particular format that only Apple or Audible.com support.

Well I get my music from a variety of sources, much of it in MP3 format from rented audio books. iPods don’t remember where you stopped on an MP3 file, only on the M4B format. I did some Googling and as recommended by Michael Alderete I downloaded and used MP3 to iPod Audio Book Converter. It converts MP3 audiobooks to the M4B format, can combine multiple MP3 files into a single file, and is free. Best of all, it works wonderfully.