I was impressed by the iPhone's camera, but that's only because I was coming from an HTC Mogul, which had a horrible 2MP camera.
That I can (mostly) do what I want with my N1 without relying on a jailbreak is what makes the N1 a win, overwhelmingly. That said, it is ironic and frustrating that your warranty is voided when you unlock your bootloader, a part of rooting a N1. It doesn't matter if there is dust under the screen, they see the "unlocked" icon and turn down warranty requests.
At least, they were- I'd love to hear that things have changed... Unless that changes I won't be rooting my N1, and I'm glad I didn't do that first thing- I just had to send my two week old N1 in for a swap to HTC because of dust under the screen. :/