The simple answer is:
If you want a toy - choose the iPhone
If you want a mobile computing TOOL - choose the Android device
If you don't mind Apple controlling the type of purchases you make and the price you pay for all Apps, Songs, Movies, Books, Magazines, Video Rentals, Audio Books, Etc., then get an iPhone.
If you don't mind or see an issue for the industry and future progress in Apple taking 30% of the profit from every single piece of software or media sold to be used on their device, then buy an iPhone.
If you would rather choose to buy or get your apps free from any online market you wish, and see each respective developer and Media publisher receiving anywhere from 90%-100% of the profit from each offering they sell or offer as a beneficial incentive and advantage, then choose Android.
If you have never previously owned a mobile device much fancier than a "feature phone" such as the Motorola Razor; and are more motivated by the fact that subsidized "smart phones" have finally broken below the $200 mark; you might just find yourself naturally peer pressured into buying an iPhone. You do it, simply because you know of other folks who have also. Good enough.
If you have used previous generations of Smart Phones and mobile computing devices and App stores (i.e. Handago, pocketgear, etc.,), well before the data and voice carriers offered subsidized plans on such powerful, versatile, past mobile devices. (i.e. Compaq iPaqs, HP iPaqs, Windows Mobile Phones, Windows CE ultra compact computers, Widows Tablets, Apple Newtons, Palm Devices, etc..) Then you will probably expect true mobile computing power right out of the gate for your next generation device.
Transitions for those requiring more serious or profitable tools will likely require such users to consider several advanced features and require their chosen device to depend on many standards and relevant innovations in order to capably depend on a device and it's chosen platform for many years to come. For instance; true multitasking is probably important to these users; a competitive wide open marketplace for Apps; as well as potentially quick built-in methods for entering data and effectively editing any and all document types; Therefore offerings such as an on-board or slide-away physical keyboard, etc.. Or at least options for industry standard add-ons and accessories, such as reusing your old monitor, bluetooth keyboard or existing wired or wireless mouse. Expandable and removable memory are probably a must, and the benefit of being able to slap in a 2nd or 3rd battery while traveling or during a day filled with heavy call volumes or data activity are all crucial considerations.
Again, if you just want a toy, get an iPhone; if you want a tool, get and Android device. Even if you are just the casual user but see benefits in using modern features such as High Definition video recording or movie viewing while on trips, you will want to strongly consider a device which again, provides expandable and removable storage, just as your digital camera and media playback devices in the past allowed you to depend on. At least having the ability to backup and/or charge your device using standard USB cables would also be a cost savings and convenient consideration for these casual users as well.
A couple of weeks ago it was news when Apple & MS partnered together in a $4.5B investment on 6000 Nortel Patents. Necessary purchase for Apple, since they have only made phones for a few years, yet market as if they innovated hardware. Patent portfolios are crucial to maintaining such a facade along w/ perceived market shares. Today the announcement was made Google bought Motorola's Mobile Division for $12.5B which provided 17k patents and 7.2k pending! Certainly is a trumped move insofar as phone based patent portfolios! 17,000 existing patents and over 7000 pending.
With motorola's established position within the cell phone market for decades, those have to be some substantial / crucial patents! Incredible for Android! I already loved my ATRIX and laptop dock, now I'm even more happy with the purchase. I hope they build on the innovation of Webtop, that the ATRIX provides, it is an incredibly useful exploitation of the fact Android is a VM!
This addition of such a massive amount of mobile computing and cell phone communication patents to the Android platforms growing portfolio, will only help further the gap between device made for serious mobile computing users and those centered around garnering additional profits from future media and game sales. Both devices have there place in the consumer market; some for business minded individuals and those seeking user based profits; and others for entertainment, disposability and better at simply providing more profitability to the device manufacturer. It is good to distinguish between the two prior to making your next purchase.
We live in a day and age where so much of our technology is already considered virtually disposable from it's first day of ownership; this further encourages an already rather fickled nature of early adopters and consumers of gadgets and electronics. In the case of mobile computing, the power is really in the connectivity and freedom it provides; therefore, any unforeseen mandate to be limited or vested towards one manufacture of a single proprietary device; it's un-transferable media; a single, uncompetitive, profit limiting, application market; and countless device specific hardware accessories, must be avoided.
Strongly consider a mobile computing platform which provides a the most powerful uses of all your costly hardware; the most connectivity and surfing freedom; and the most sustainable cost saving in the future. This platform should help you fully exploit the entire range of cloud based tools and connectivity options each web-day of progress is already providing and will reveal in the coming months and years. A platform you will therefor continue to see command the majority of users and in turn attract the most competent developers and future innovations.
This basis for freedom, value and versatility was the clear differentiator and reasons for domination during the 1st PC revolution and it will be the advantageous way to select your vested interest during this new mobile computing revolution. Leave the buying of toys for those adults who don't know any better. Spend your money on technology which avoids the agenda of trapping you into limited, proprietary ecosystems or restricted uses of the web.