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The Engadget video looks like its easy to use, my 4.3b1 is just about to finish, so I will try it myself soon. I like the idea personally. I do wonder how easy it is on the iPhone though. I don't really want to put the beta on my iPhone4 at the moment
I think Apple is on the fence on this one, hence the release and request for dev's to try out, I wouldn't mind betting an Apple meeting about losing the button was also split :-)
I agree with Rob, it's thinkable on the iPad but not on the iPhone. It's just too small for four or even five finger gestures and you couldn't control it with one hand anymore - that would be a big loss of usability.
Well I'm hoping the home button goes. To reset the phone you can just hold the sleep/wake button extra long or something like that. Maybe some kind of UI change is happening with iOS 5 and we will have a soft home button like honeycomb.
It would be fine for the iPad, but would be stupid to lose it for the iPod/iPhone crowd. Have you tried five finger swipes on them? No dice.