It's funny that this is your reason to use an iPhone because a quite similar experience of mine was a main reason for my decision to stay away as much as possible from closed systems :)

If I could do it all over again, I wouldn't build my listening workflow around iTunes. Ten years of play counts, dozens of smart lists, and hundreds of Protected AAC files later, I'm pretty locked-in.

Just fyi: I believe [make sure this is right before you do it!] you should be able to subscribe to iTunes Match ($25/year), delete the songs from your computer, then redownload them in the DRM-free format. Not free, but probably cheaper to do that than to upgrade a bunch of songs one-by-one to the DRM-free format. Then you could drop the iTunes Match subscription.

Not a bad idea. I wonder if all of my previous purchases are still available in the store, though. Some distributers pulled out of the iTunes store when they dropped DRM.