OP here. I havent checked this post for a while now but since I have a case, I though I'd update and share my insights.
I got the 16g black iphone the other day and used it without a case. I was so nervous about my unprotected iphone that i rushed back into the apple store the next day to purchase a case.
I ended up getting the incase protective cover and couldnt be happier:
Apple Store (U.S.) - Incase Protective Cover for iPhone 3G
As I originally indicated, I wanted a case that would provide shock protection. While the incase case does nothing to protect the screen, it provides great protection to the rest of the iphone. It's really solidly built and fits the iphone snugly while minimally impacting the form factor. Coincidentally, the back of the case has an etching/engraving (not sure what to call it when it's done on rubber) that looks like a topographic map. Its only on the back and I think it looks cool.
The only issue I have with this case is an issue indicative of all rubber cases: when you have the phone in your pocket and get a call, its a little harder to take it out because the rubber grips to the fabric. So for all you emo children and hipsters wearing tight pants....I might look into a different case.
As noted previously, the case does not provide any protection for the glass touchscreen itself. I know its supposed to be scratch resistant blah, blah, blah, but if I get a scratch on the glass it will annoy me until the day I get a new phone...maybe even longer. That said, I'm planning to get one of those clear plastic films like this one:
Apple Store (U.S.) - Power Support Crystal Film Set for iPhone 3G
As a final note, I know there are many other cases that provide more comprehensive and even better protection. However, my aim in getting a case was finding one that didnt increase the size of the phone while still providing as much protection as possible.