so wait, let me get this straight.
You have an iPhone that you don't want to use for GPS so the fact that it sucks at GPS doesn't matter, but then you want it to play your music and use it for that? Do you want it as a phone only (like you said) or to do other things as well (like you also said)?
Me, I'm a fan of integration, as long as it's done pretty well. I like being able to pull my phone out of my pocket in the middle of nowhere, lost, google the address I forgot to write down before leaving (or pull it up on my email account), enter it into my GPS app, have it tell me how to get there, or search for the closest auto parts store, then bring up their phone number and simply click it to call them and find out if they have a part I need.
Pretty cool to get an alert email from my server saying something crashed and be able to SSH in from my phone, in the middle of the woods, and fix it, too.
All that goes out the window on the occasion that it crashes or starts acting up and pisses me off, but when it's working (which is most of the time) I love it.