I'm enroute to Dallas, TX right now and it's a wifi flight with American Airlines. I'm typing... I mean tapping this post on my iPhone 3GS, after paying a nominal $7.95 fee.
The Internet speed on the in-flight wifi connection is plenty fast to download a music album from iTunes while updating 4 apps, browsing the web and checkng email, without any noticeable slow down.
GPS looks a little confused though - it thinks I'm still at the airport even though we've been traveling for a couple hours, probably because that's where the signal is coming from:
SMS also doesn't work, so don't plan on texting on these flights. You also can't share a connection between a laptop and mobile device - you have to pay an additional connection for a laptop or mobile device (iPhone, Blackberry, etc).
I'd love to see wifi be free on flights, but all things considered, I felt it was still a great value since I was able to get a lot of work done (and play) instead of wasting a few hours in the air.