I have the Incase Power Slider Battery case:

It's for the 3G only (and 3GS, I believe), and costs $99. For most people, I have to imagine the biggest downside would be the thickness of this case. I tend to keep my phone in a big cargo-pants pocket, so it doesn't bother me, but if you keep your phone in the pockets of jeans or something, this case may make it prohibitively large. Fortunately, the case doesn't make any side or top buttons hard to access; same with the camera and audio connector.
The bigger downside for me is the connectivity. To charge the phone and case, you use a mini-USB connector on the bottom of the case, which is fine. However, you cannot charge and sync simultaneously. So to sync, you hold a button on the back of the case for a few seconds, then plug the cable in and iTunes will sync as normal. Then to charge, you have to disconnect the USB cable and reconnect it.
This is all outweighed by the extended battery life, though, which can generally get me through a day of work -- 10 hours? before the case's battery runs out and the phone battery starts being used.
And in terms of the size; I find it's actually nice to have a little additional weight and sturdiness. The price was a little steep, but I've found it's definitely worth it.