I love the 3-Megapixel Camera. It works great and the pictures come out crystal clear. It is a very good camera and I enjoy all my pictures, very much.
I still think its a poor camera in comparison to other phones at a similar price range. The camera has never particulary been the most important part of a phone for me though, so I don't suppose its that big an issue - and its quite acceptable for your normal pictures.
Yes it is one of the best features we can boast about everytime we show our iPhone to our friends. The 2 megapixel camera is an awesome thing and it is one of the options that I use everytime when I have an iPhone in my hand.