I develop professionally for both platforms, and have both types of phones (And ironically do book, sound and video apps as part of my development life)
Android (the ecosystem, not the development environment) is different than the iPhone, but not better or worse at this point. Both have strengths, and once most phones are carrier upgraded to 2.0/2.1 (as they're supposed to be before 7/1/2010), some of the biggest weaknesses will go away. The amusing thing is that none of the fundamentals are better on android beyond the multitasking, and it's apple's willful overcontrol of their ecosystem which grants 80% of android's wins.
The developer tools suck for android compared to the Apple ones (I've spoken about this at length in past comments), especially their lack of GUI layout tool.
Android is a great product though. If the iPhone wasn't here, people would be buying it in droves still (and people are buying it in droves, which wouldn't be the case if apple went for a more carrier agnostic approach). There is no quality control so everything looks different, for sure. Google's apps are meh for the most part. However that little bit of openness makes it so people can do what they want on the phone, and it has an API for most everything. Here are things android can do that the iPhone can't:
Reactive intents to handle events on the phone via custom third party apps.
These intents means the phone's ringer can be turned off for certain numbers at 6pm, other calls can always be ignored, other calls can result in loud warning rings. Apple has no way at all to even change half the sounds, never mind ringer profiles for different times of days like cell phones have had since 1999 even in the default interface, never mind actually writing a 3rd party API for it.
Android phone apps can interact with the calendars. Apple's can't.
Android phones can use custom ringers. Apple's Can't
Android phones can record telephone calls, Apple's decided that's verboten no matter what.
Android phones can help manage the small resources on the phone. Apple gets pissy when you even think about looking in areas of the phone beyond your sandbox.
Apple phones are forbidden from using third party calling services. Android phones can use whatever they want (this really bugs me, as I use 2 different calling services to help with business issues).
Additionally, android supports physical keyboards (did you know women with nails can't really use onscreen keyboard? Their nails don't register on touches so thumb keyboards are very awkward if usable at all for them).
Oh yeah: Other strengths: Available on all major carriers at the moment. The current height of agnosticism for the iphone is that you can hack your iPhone to run on t-mobile.
The Apple error handling capability, especially when dealing with movie player errors, is practically non-existant. Android has much better disaster recovery abilities
Where are the apple strengths?
The UI is prettier (but not always more usable) for most apple apps.
The on screen keyboard is stronger on the iPhone platform
The dev tools are far and a away better
The documentation and examples are much better for iPhoneOS
The MoviePlayer is much better on iPhoneOS (even though they did a vast, app breaking revamp for 3.2).
The fact the apps are compiled C code based of GCC makes the platform easier to target with 3rd party languages (like Corona or others)
The fact there are so many fewer phone installed OS's (and that the user is stuck where their handset manufacturer provides them) means apple has a big win on consistent underlying OS.
The constant screen aspect ratios allows cheaper fixed width art.
The creation of support technologies (such as Notifications, In-App purchases, and HTTPLiveStreaming) make the apple iPhone do certain things quite a bit easier.
So all and all: the iPhone is more polished. But lacking an iPhone for their carrier, many people are very happy with android phones (at least the android part, people are POed about the battery life in the G1). Additionally, many people find the Apple Will Control Your Life not just idealistically chafing, but also in the way of what they're trying to do every day. I'm seriously considering swapping to an android phone for everyday use once they upgrade them all to 2.0/2.1 so I can get reasonable 3G performance (and so I can use multiple dialers). But at the same time, I'm buying an iPad (Which ostensibly I'll need to use for work to debug iPad apps, but I also expect to surf with it on the couch). Apple has repeatedly exercised control in areas which do not help it's technical fundamentals and has lost out to android in those areas. It's almost comical that Android is better than iPhone in some places only because Apple is controlling about certain things.