To be honest the iPhone as we know it was unveiled over a year ago. It's a very cool piece of hardware, but it does have limitations compared to, say the Nokia N96 (comming soon)... average enough camera, no video recording, have to send iphone back to Mac to change battery, no 3G, no SD card etc, etc..
These limitations have been loudly criticised since it's release... so taking all that into account, and based on the original iPod's introduction and subsequent development, I'm guessing there's an iPhone 2 in the works sometime between June and Jan '09. Anyone who buys an iPhone now, and gets locked into a contract, is going to feel well peeved if/when it arrives.
Personally I say hold off until then if you can... if enough punters do that, maybe even make 02 nervous enough to drop numbers- then pounce when it arrives.
That's what I'm doing anyway.