It crashes in call (total power off); data availability hasn't been stable (I would say about once a week I have significant issues where I won't be able to use email, a browser, etc. for the entire day); maps/GPS is iffy; I think there are some interface design flaws.*
I used to have an iPhone 3G. I thought it was great.
I switched to VM for the plan -- $25/month for 300 minutes, unlimited text and data ($40/month for 1200 minutes).
Honestly, though, these problems haven't really bothered me too much. I've found that for $25 or $40 a month it's fine with me if the experience isn't "perfect".
*My friend also experiences these same problems
Search #vmdd (Virgin Mobile Data Down) on Twitter and follow the fun.
The Optimus V is a late 2010 phone. My iPhone 3G is from 2008 and hasn't been sold by Apple for a full generation. Your comparison doesn't really make sense.
Not that they're that expensive new. But if portability was easy there would even be an omnipresent resale market for used phones, so even boring phones retain resale value, as is common in other countries.