The deal with third-party applications could be caused by some significant changes to the underlying code base in the iPhone's operating system. Some of the changes heavily affect the CoreAudio function, which means some applications that access the CoreAudio function may no longer be properly coded to match the new software, rendering them broken. The developers of those apps will have to update them in order to make them functional again.
A more serious problem is the "could not connect to Internet" issue faced by some. Some users are unable to connect to the Internet via the iPhone's cellular radio (Wi-Fi still works). Suggested fixes include switching off the 3G radio. Without cellular data working, I'd be pretty frustrated. Users might also want to try restoring the iPhone.
Other bugs are that the iPhone isn't recognizing user SIM cards on reboot. Google Maps is showing some users distances measured in kilometers rather than miles. There are reports of users having problems deleting e-mails. Yet others report very slow access to the iPhone Apps Store.
In all, not a nice list of new "features" to come along with the software upgrade.