Since the iPhone is so new, there simply are not a plethora of case choices yet like there are for the iPod. Because the iPhone has a reputation for being far more scratch resistant than it's iPod cousins AND because you need access to directly touch the glass surface to interact with it, most cases leave the front vulnerable to a fall. I've seen too many photos online of broken glass on iPhones due to a fall at just the right angle.
The versatility of the clip lets you attach it vertically or horizontally, but it isn't one I'd trust on a belt. I'm a woman and don't need to look like Batman w/ a utility belt, anyway, so I don't like all my electronic gizmos hanging all over my waistband. When I'm at work wearing dress slacks or relaxing in my jeans, I have the case in my pocket w/ the clip hanging on the outside. This keeps it from popping out of my pocket when I sit down (it's in the front pocket, not the rear).
I feel the extra leather padding is protecting it from any slight impact I might experience at work (low desk, opening a drawer, etc.). Like any sleeve-type case, you want to make sure you don't get grit (sand, gritty lint, crumbs, whatever) inside the case, or the act of simply putting it in or pulling it out could score the beautiful surface of the iPhone.
This is a temporary case for me until someone comes out w/ a better one. I'd like to see one that gives the nice leather protection, with a flap, instead of having to pull the unit in and out of its case, has access to the dock connector while it's in the case, and has clip that is permanently affixed to the case, yet low-profile like this case and not a big bulky swivel clip like so many for men-only belt cases.
Another annoyance is that when my iPhone rings, I am forced to finagle the phone out of the case, usually inadvertently touching the volume buttons, which then sends the call to voicemail.
The purpose of this temporary case was to protect the surface and from falls and so far, it has met that need - and compared to the other cases available as of this writing, it's the best I could find.