On the one hand, I think that Apple have something of a point in that, taken as a whole, the design has a measure of originality to it.
Oh the other hand, that doesn't make any it non-obvious from the point of view of granting a patent.
Take the single button at the bottom - that's Palm and probably others besides. The large screen, well, that's really just a decision not to have a keyboard and so once you decide you won't have one, extending the screen as far down as possible cannot possibly be considered anything other than obvious. What's the alternative? Leave the space just as plain plastic?
As for the shape, well it's a f%$king rounded rectangle, which - confining ourselves to mobile communications - was the shape of numerous mobile phones well before the iPhone.
So what do you have? A PDA with the keyboard removed and then shaped like a phone.
And if that is 'non-obvious' to the folks at the USPTO, or indeed a judge, then one suspects that those holding the aforementioned positions might be better placed to carry out their responsibilities to the public if they had even the barest understanding of the subjects they were dealing with.