Well free would definitely make it more attractive. The Cloud storage is good in theory, but it's a pain to actually use. If you've loaded a movie for example and you have to pause it to do something else on the phone you have to start it from the beginning when you go back into it. The email address they give you ends up just being used to receive news from Apple most of the time as most people don't want to switch to a new email. You can't access MobileMe from all browsers, either. It doesn't work on IE, for example which is all I can use at work.
The phone location is cool, but when I tried it once for kicks it was accurate to within 1.6 miles using a 3GS so it wouldn't be much help if stolen.
Motorola offers the same thing on their MotoBlur devices that I tried and it was accurate to within 44 yards.









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