HP's TouchSmart IQ770 all-in-one PC is my choice as the top innovative product of the year. This is the first all-in-one PC on the market to boast a touch-screen display. I wouldn't be interested in an iPhone, thats just me, I don't do mobile handsets but the HP I wouldn't mind having.
The product is pricey at $1,650 but it is beautifully designed, and its touch screen makes it handy for just about anywhere which is a big selling point in my book.