The resolution independent nature of the interface for the iPhone should make up for the lowered resolution.

However, nothing makes up for this:

“We define everything that is on the phone,” he said. “You don’t want your phone to be like a PC. The last thing you want is to have loaded three apps on your phone and then you go to make a call and it doesn’t work anymore. These are more like iPods than they are like computers.”

No contest. The iPhone will not replace my 770 *or* my Treo.