This is a common sentiment regarding the 1.1.1 update — that it deletes third-party applications. That’s not a fair description, though. All iPhone updates, including the earlier 1.0.1 and 1.0.2 updates, are installed as complete clean installations of the entire system. One of the advantages of a closed system is that it’s far easier to create upgrades for — a “just wipe the whole system clean and re-install the new one from scratch” installer is far easier to write than a “let’s carefully update only those files that are new and leave everything else, including third-party stuff we don’t even know about, in place” installer.
To argue that Apple should have left third-party apps and hacks installed is to argue that Apple should have expended some amount of engineering resources to support something they neither endorsed nor encouraged in the first place.
