Smartphone GPS systems that come with the smartphone are like you say, designed for use on highways. But a smartphone is essentially a PDA combined with a phone, i.e., you can add software, and in at least some of the times (if not always) there's a standard software interface for software to talk to the GPS hardware. I used National Geographic Topo software (PocketTopo), and got some of what you're talking about in terms of what a "real" GPS does. I can't strongly recommend the software, as I found it buggy and slow, but it did the essential --- showed my location on a topo map. There are other options available, but you would have to research this yourself based on the particular device you went with.

You mentioned five things you wanted from a handheld unit: "topography, altitude profile, barometer, 12 channel receiver, water-proof housing".
Topography --- check, depending on what software you get for it (which in turn is impacted by the processor and operating system).
Altitude profile: check, again depending on software. With mapsets of any size, that feature was broken in the PocketTopo software, but certainly with the right software, altitude can be calculated with a GPS; I seem to recall that the accuracy is less than horizontal position, however. But with a location, it's also possible that the software can pull the altitude from the underying topo map, or that you can just read it off the contour lines yourself.
Barometer: nope, that's an option on some GPS units, and of course there's no reason why one couldn't be built into a smartphone, but I reckon there's little call for it. I have one in my altitude watch however ... (FWIW).
12-channel receiver --- you want to make sure your unit has a true GPS (doesn't rely on local cell towers), but mine worked great, locked on pretty quickly, and the SiRF Star III chipset did a good job under tree canopy.
It won't be waterproof, but the GPS function in my smartphone worked fine in a ziplock bag.

Extras like moon cycle, titde tables, hunting/fishing times --- again, these are just software. Freeware, shareware, and purchases software is available perhaps to do some or all of this. For example, I have a freeware application on mine that shows sun/moon rise and set times, which can be adjusted based on position (long/lat).

You said:
"The phone, PDA and camera could certainly be combined into a single unit. I would have bought one, but they were prohibitvely expensive."

If you can buy a unit as part of a contract with Verizon or AT&T (the better two choices for backcountry cell coverage), the cost might not be as high as you think, but indeed, if you want or need to buy an unlocked unit they can run pretty high.

You said:
"Since the PDA's main function is for journal entries, I wanted a largish screen. I also intend to write my own journal-keeping software (another exciting innovation), so it must operate on Windows Mobile."

Mine doesn't have a super large screen (it's 2-1/4" x 1-3/4"), but I found it fine for doing a daily journal on, coupled with a folding bluetooth keyboard. You can look at my journal (link at end of this) to see random entries, virtually all of which I typed up at the end of each day on the trail. My device does run Windows Mobile, but I'm not sure why a person would write up their own journal-keeping software (?). I found that just posting to www.postholer.com (via email or web interface) worked great, FWIW.

"To include a camera and WiFi (I refuse to pay for 3G or even EDGE for that matter)"

With AT&T it was (at that time last year at least) possible turn turn on unlimited internet access and then just turn it off again when I didn't want it, so for my use --- and in the context of already having a contract --- it wasn't that expensive, and it was very useful. I did get WiFi a few places, but in a couple of those the WiFi security interface didn't work on my mobile web browser (so that even with the password in hand I couldn't log in).

You said:
"I am happy to see I am not the first to go this route. If I may ask, how did it work out for you on the PCT?"

I'm somewhat of a geek too, but FWIW it worked great. I did the whole trail (2600+ miles) and used and carried the device the entire trip. The device itself has some design and implementation flaws, but a person learns how to work around those. All my pictures came from this device, and I considered them adequate for the job. The GPS helped me out in a few cases where the trail seemed to disappear or the signage was unclear at a junction, etc, plus it helped me be specific in my daily start/end locations for the journal. I used the built-in voice recorder some, though not a great deal. As a journaling tool it was marvelous. I rarely read books on it, but if stuck in a trail town I infrequently did, and this was a nice option to have (www.baen.com offers some nice free Sci Fi and I bought some from them too). The phone was of course quite useful at times, and the internet access was great to have --- I checked weather reports for places I was heading too, looked for trail reports, and had email access (for better perhaps and for worse).

This approach isn't for everyone, but it worked well for me, and I expect the suite of tools will get only more powerful and useful in future.

This reply is already way too long; for more on smartphones, look at http://postholer.com/smartPhone.html