I believe that Apple 'declared war' first, when it began rejecting Google's iPhone applications last summer. First it rejected Latitude, then it rejected Google Voice, which is when things really started to get nasty.

Google has been slightly more subtle with its shots back. It released Navigation for Android, which I strongly doubt will be making it to the iPhone any time soon. It acquired AdMob before Apple could. And then it launched its own phone (less subtle, that one).

I'm curious how early Jobs found out about Google's plans for the Nexus One. I'm sure such devices take a long time to make, and if he heard last spring/summer that Google was making its own phone, that might have sparked all of this. That's just speculation though.