The major innovation was the scrolling: none of the previous touchscreen phones had smooth, natural, physics-based scrolling on a capacitive (e.g. finger, not fingernail) touchscreen. The home screen is a prettier version of the Palm OS one, and much of the UI is similar, although it feels a lot more natural with animations and without a desktop-style menu bar.
Are better scrolling and natural animations really innovation? It's much more of a progression. Touchscreen is the same? I believe the quality of touchscreens weren't good enough before 1997.
Yes, they are. It's what changes the device from a standard computer (with an indirect interface) into direct manipulation of objects on a screen. With Palm OS-style scrollbars or desktop scroll wheels, you are manipulating an object that affects something else.
With iOS-style scrolling, there is nothing to learn. That's one of the biggest issues with Android (and, conversely, one of the advantages of Windows Phone and iOS): because Android has not been able to match the fluid scrolling and realistic physics, it breaks the illusion of physicality that the original iPhone managed to first create in 2007.
