While the iPhone is a great handset, I certainly wouldn't choose it to replace a landline without very careful testing where I needed wireless service. If anything, make certain you have another reliable GSM handset to use as a backup if either the iPhone or ATT network in your location(s) decides to flake out. I don't feel it's worth the ETF fees anyway, but YMMV. Do you have any friends in your area to be able to properly get some feedback on ATT vs Verizon service where you live(?)

Also, you might reconsider choosing a single device for all those tasks. While the iPhone is a very capable device, the still & video capability still pales compared to very inexpensive point and shoot models. Most of the lesser quality on camera phones in general is related to the fact that the lenses & sensors aren't as good. A $50 Canon Powershot is a better choice for snapshots of the kids IME. It's also hard to beat a basic Sony handycam. I guess it matters what you plan on doing with the videos/photos and what quality your require as well. If you need to be able to upload immediately or upload things to social networking sites then perhaps the iPhone might be enough if you can factor in lower quality content. iPods are also cheap enough now where you might benefit from keeping a separate one dedicated for your dance studio work. For example, we have a couple of older 4GB minis for road trips (direct digital w/ an Alpine deck) and a larger one that plugs in an Onkyo A/V receiver.

There *are* third party options for using other handsets w/ iTunes, but it's somewhat of a hack for the most part and not for the non-tech savvy. Verizon handsets wouldn't be my first choice to do this though for other reasons. OTOH, iTunes sync w/ iPhone is painfully easy and a selling point, that's for sure. For your needs I would consider finding a phone with good reception first if you want to replace a landline, then all the other stuff second. Has Verizon performed well for you thus far?

cheers,
Pedro