To my eyes… they’re roughly the same quality once taken. And if I’m not mistaken the 1st gen iphone is a 2.0 megapixel camera and the droid is 5 megapixels. Yeesh that’s embarrassing.
Reports have complained that the Droids camera takes ages to open, shoot, and process. I'll bet that's what he meant when he said it really sucks. That would make sense, given that the device must process a lot more to take in all 5MP. Hopefully they'll refine this process in the future for faster shots.
1) take two pictures of the same size yields a better result with more megapixels
2) taking a larger sized picture on a camera with more megapixels and scaling it down yields a better result than taking a picture at the scaled down dimensions with a lower megapixel camera
For example: HD video cameras. They look like crap in the dark, even at YouTube dimentions. My Flip video SD beats them hands down.