Pretty self-explanatory:

iPhone 3G GPS problems
http://www.engadget.com/2008/08/11/iphone-experiencing-gps-problems-after-2-0-1-update

iPhone 3G MobileMe problem
http://www.engadget.com/2008/07/26/apple-admits-to-lost-mobileme-messages-bad-karma

iPhone 3G cracked
http://www.engadget.com/2008/07/30/are-iphone-3gs-cracking

iPhone 3G App remote kill-switch
http://www.engadget.com/2008/08/11/jobs-60-million-iphone-apps-downloaded-confirms-kill-switch

iPhone 3G 2.0.1 breaking carrier unlocks
http://www.engadget.com/2008/08/05/iphone-2-0-1-breaking-some-carrier-unlocks

I understand that pretty much any software/hardware product has bugs/issues in it and that it is virtually impossible to get everything right and please everyone. However, for Apple's slogan of "it just works", the iPhone definitely does not live up to it.

Edit: Great! Now this article pops up over at ZDnet blogs:
Congratulations Apple, you made the iPhone less stable than Windows Mobile

It just keeps getting better!