The issue at this time with iSCSI is not that it can by itself offer an alternative to FC, it is that the availability nature of the architecture is not fully baked.

Hardware based initiators such as QLogic's iSCSI lineup are very nice but provide a hardcoded (single point of failure) path that once it fails, can be switched over by adding the LUN masking into a redundant card, but by then, your applications are already down.

Software initiators from Microsoft or Linux work the best as they can bind their iSCSI stack to an already HA virtual (teamed) NIC and rely upon that to provide path redirection for iSCSI packets. This comes at the expense of negating some of the offload functions that TOE iSCSI enablement provides.

More systems are becoming virtulized this issue becomes even messier (for the time being)
http://communities.vmware.com/message/858889#858889

iSCSI is great for small servers or servers which do not need HA (or are provided HA though a software abstraction such as SQL DB mirroring, Domino clustering, etc...)