It is rootable, so you can remove the SE crap from it, just havent got bootloader access yet to load custom roms/more up to date roms.
I personally sold my iPhone 3GS to get an Xperia and havent looked back. Even with 1.6, it's not that bad. The only good thing about 2.1 coming later, means I wont get bored of me phone as quick, which i'm prone to doing. Hopefully for me, it'll come out just as I get bored, so will put a new lease of life into it.