As far as the music goes, I'm not entirely sure how much music you can fit on them... I've never really looked into the iPhone as a mediaplayer.... But I guess it's possible. No different than any other phone as far as I know though.
The games I found for free were actually pretty snazzy, but again.... it's a cellphone so I don't really see why it even needs games on it. Regardless you're going to end up paying for most of the games you'd be interested in playing, and remember, it's a CELLPHONE not a PSP so don't expect the games to be extremely different from your normal phone. There is exceptions to this, as more 3d games are being added to the store.
My experience with SMS/Text Messaging on the iPhone is dismal. Its a pain in the ass, and unless you like correcting mistakes every other letter you will probably just prefer a different phone. However, I only messed with her iPhone for a good 3 days. Apparently it takes some getting used to but even then you make alot of mistakes, so she says. But, it's totally up to you.
The phone features are touchy, like text messaging I'm guessing they take some getting used
before you start to become effective with them.
Make sure you don't sit on it first of all, I've seen two or three broken iPhone from people putting them in their back pockets and just... KAPLOP....
Basically, if you are comfortable spending that much money on a phone that isn't really a phone.... Go for it, you probably won't regret it....
If you are expecting it to actually be useful as a phone, and don't feel comfortable spending that much money on an iPhone I'd probably look into a different phone. Because honestly, unless you're totally into ALL of the pros despite the cons (and viceversa) it might be a waste of money for you.
It really all depends on what you're expecting from it, and what you want/need it to do and whether or not it can meet those needs/wants