The watch phone we've seen LG toying with over the last few days (and behind glass at last year's CES) is now for real, and will hit production "later this year"
LG demo'd the phone from the stage here at their press conference, and it features 3G HSDPA. So as long as you don't mind speakerphoning your every call, it can be yours in the not too distant future. [CES 2009]
DISCUSSION
To be truly functional, and to avoid the stupid predicament of just talking to your watch, they need a "quick disconnect" feature that ejects the face from the band, and you can just use it like a regular phone.
I hate to use bluetooth unless I am driving or sitting on the couch playing video games, because I don't care what anyone else says, you look like a wanker when using a headset in public.