Most of our lifestyle still seems to be about keeping up with the Joneses - even if we don't know who the Joneses are! Its like that saying "he who dies with the most toys wins!" Only now it isn't the number of toys, it is the newness and greatest technology toys that win.
Cell phones - yeah I've got one - its a Razr. But it was free with my plan a year ago or I wouldn't have it. But I know the dilemna, my daughter needs a new cell phone - hers is 3 years old and getting finicky. So I want her to get a cell phone for what she uses. She wants something with web and music, just because. Not happening.
I'm still very old school when it comes to cell phone use, if I'm in a crowd and my phone buzzes (never rings) I'll either ignore the call or excuse myself to answer the phone. But I do love to sneak a text in when no one is looking!
We just did a similar discussion with my daughter on a laptop computer. She "needs" one for school. Meet the basic requirements or get the latest and greatest? We ended up in a compromise...she got a basic MacBook (more $ than a basic PC, but more useful for her major). If she had decided for more power, the upgrade would have come out of her pocket. She thought it over and decided that the basic was just fine, in a few years she can get the super version if she needs it.