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Stripping requirements down to the bare-bones

Jason Fried of 37signals posted recently about how they choose the essential vs. non-essential requirements for v1.0 of their products. This got me thinking that:

a) what a great idea, it makes perfect sense
b) how many client-driven projects would allow such a thing to happen?

With agile development and the process of release & iteration planning in particular, essential requirements would be moved in front of non-essential ones, so maybe when dealing with external client-driven projects the first iteration (or so) would produce the 37signals' v1.0 release?

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