I've been using the Droid and loving it since it was released on Nov 6. For me, it almost replaced my laptop for casual internet use. I love that I can quickly switch between my applications as in a real OS. I also love that I can download whatever apps form wherever I like. (Again, more like a real computer, and not some totally locked down environment with a ridiculous process for getting apps from developers to users.) This is my first smartphone because it's the first one I've wanted.

It is a fine music player if the stock 16G or other microSD card is sufficient. The default player is a bit weak, but there are some good replacements in the market. I found one I like called MixZing (Lite version).
While the in-built speaker puts out great sound compared to competing phones, my first impressions are that the sound from the headphone output is a bit weak. I think my iAudio 7 can do better. So it wouldn't me by first choice for listening to tunes on the go... but could be good enough. If you could somehow use an amp conveniently, I thought it helped a lot (while stationary).
I can't believe I just typed that all out from my Droid hw keyboard.