1. the reactions to "flick to scroll".
2. reaction to pinch-to-zoom.
In both cases the audience was just gobsmacked: oohs, ahs and cheers all around.
For people saying there were other devices out there at the time with similar or better hardware specs, or even comparable feature sets, I think you are totally missing the point. That kind of comparison is making the same mistake as the infamous "Less space than a Nomad. Lame" Slashdot comment re the iPod. I remember trying out the original iPhone the second day it was on sale, and just being blown away - and I worked in the mobile industry at the time and was well aware of the features of other phones.
The overall experience of the iPhone was just legions ahead of anything else that existed at that time.