As missfrizzle said the Android phones running systems are so much better than the iphone. Don't ask me why, my DH is certainly the phone/computer guru in this household.
Android fanbois think everything 'droid is brilliant and hate Apple.
Apple fanbois think everything Apple is brilliant and hate Android...
Pros for 'droid: More customisation, typically supports external devices, not locked into iTunes and Apple formatting. Supports Flash websites. Oh, much easier to get pirated apps.
Cons for 'droid: Interface is not quite as polished as Apple, more technical knowledge is required to really get the most out of the operating system, so a lot of people won't ever get the full benefit. The 'droid app store is a fairly ordinary interface and they don't control it very well so they have more instances of malware.
Pros for Apple: Slightly better interface, tightly controlled operating system so updates etc are easy. iTunes is also tightly controlled, less chance of malware, the interface is reasonable.
You can jailbreak most iPhones and get a lot of customisation features, but the average user won't be able to do that.
Cons for Apple - no external devices, locked in to Apple formats, no flash support. iTunes (I hate iTunes and QuickTime, they work but I still hate them)
A lot comes down to personal preference. If you're not into tech/tinkering and just want a decent smart phone you'll be happy with either. If you really like tinkering with it, I'd say get a 'droid. If you just want it to work I'd get an iPhone.
Play with both in store and see which interface you prefer. There's not a massive difference, although I prefer the iPhone interface it's only a few little things that make the difference to me. (And it might just be that I'm more familiar with the Apple interface as well)