I've been using an iPhone 3G with the official Geocaching app. It works great for pulling up a live list of local caches and navigating to them. The biggest issues are GPS (in)accuracy and battery life. You also need to plan ahead and save caches for offline use if there is no cellular servize near GZ. Plus, it is much smaller than a GPSr and always with you.
I just purchased a DeLORME PN-40se which blows the iPhone away in accuracy and battery life. The paperless caching works great. It can store 1000 caches with descriptions, logs, and hints. Plus enter field notes for finds, etc. It does require a bit of preparation before you go caching you'll have to load the caches you intend to look for, which is very easy with the CacheRegister application.
I will continue to use both devices for caching. The iPhone is great for grabbing one or two micros in parking lots. The DeLORME PN-40se is a serious tool for hunting down caches off the beaten path, and the accuracy even under tree cover is amazing. It really depends on how 'serious' you want to get with Geocaching.
