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My practical guide:
iPhone good - interface is often smoother. Apple tends to lead with the nicest screens before other vendors have comparable ones. Battery life is better than most. If you can live within their "ecosphere" you will have a good time. After jailbreak, the built in unix subsystem is actually pretty usable. iOS upgrades work on all devices until they're considered out-of-service.
iPhone bad - If you can't live within their ecosphere, you end up fighting with Apple to jailbreak your phone, install software through 3rd party sources. Simple things like themes. Also, bluetooth is neutered to a small subset off what Bluetooth can do, you can't even send a photo. Browser can't download files, nor can a file upload dialog access your photos or other documents. App development is primarily in Objective C, which is for practical purposes only used by Apple.
Android good - General principle of things being possible instead of not. Bluetooth can do just about anything including mice and keyboards, I recently got a bluetooth OBD2 dongle to interface with my car. Flash support is pretty good, most Cam sites work with it respectably well. Depending on phone vendor, root access is often a no-brainer. Multiple web browsers are available, including firefox, handy for me. Multiple vendors means greater choice and competition. Multiple sizes also available.
Android bad - Seems to take more horsepower to deliver the smoothness of the Apple interface. Device vendors control a lot of things about the OS and can remove or artificially limit functionality, as well as abandon the device for newer OS releases (Devices are still shipping with Android 2.2, which was released in May 2010 and replaced in December 2010), which created the need for 3rd party OS like Cyanogenmod (which I run my my devices).
Personally, I have an iphone 4 and an android tablet, although I have decided my next phone with be android based.
The iphone was a game changer, not necessarily at launch but once they enabled Apps, or after jailbreaking and installing 3rd party apps. The smartphones of the time were PalmOS, WinCE, and Blackberry. Android had a lot of catching up to do but in my opinion is a well matched competitor now.
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