I have an iPhone 4 but am not an Apple fanboy:
iPhone Pros
1) Best App store by far
2) Lots of companies make iPhone only Apps (incliuding companies like BMW)
3) Very intuitive
Cons
1) Apple is very restrictive
2) No Flash
Android
Pros
1) Very open - anyone can make an Android app
2) More and more companies developing for Android
Against
1) Still quite new in the market and glitches
2) I have a real issue with their updates - as an example Gingerbread (Android 2.3) is now out but only available on a couple of phones - and is dependent on carrier.
You will get used to which ever phone you get, and when I upgraded in November, I chose a iPhone after weighing up the pros and cons.
I know a few people who have iPhones - none of them would consider switching, I know a few people with Androids - a couple of them would consider switching