I have both an iPhone and and Android. My original Android was the MyTouch 3G. I have to say that the phone was a little underpowered for the OS. It was still a great phone, and I liked it a little better than the iPhone, but it was a tough call. Using a class 6 SD card made a huge difference, as well as rooting it and putting on cynogen's OS image helped. With both changes, the hardware is just enough. I suspect that when 2.2 rolls out, it will make the hardware plenty adequet, and better than an iPhone 3G.
I recently passed my MyTouch on to my son, and upgraded to a Nexus One. Hands down it is a better phone than the iPhone. The only piece that I miss is that Lotus Traveler is not available for it yet. Given the specs of the iPhone 4, I don't see it blowing the Nexus One out of the water, and since there is a continuous stream on new Android hardware being released, I don't hold much hope for iPhone's future.
Earlier in the thread, someone claimed that Apple was the new Microsoft. It would be better to describe Apple as the new Apple, and Google as the new Microsoft. Apple is taking the same path that they did with the Mac. They produced a very good product that is a fine integration between hardware and software. They deny their failings, thus continuing on with them, and expect people to just assume that they are better. This compared to their competition which produces an OS that starts out kludgier, but keeps refining itself until it is better than Apples offerings. At the same time leaving dozens of other companies to push the hardware limits past what a single company can accomplish on their own.
Oh, and I can play Amiga games on my Nexus One without having to void the warranty.