Here's my take on it, after having both an AT&T iPhone 4 and a Samsung Vibrant. It's the little things on both sides that make hard for me to decide.
I love the fact that most devices are easily rooted. You can then back up all of your apps and data. For example, I had almost every level at 3 stars in Angry Birds on the iPhone, but there's no easy way to back everything up without using iTunes. As you now, if you Jailbreak, you have to be afraid of iTunes No worries with Android. After your root, you can use Titanium Backup to back up Angry Birds with the data. I've changed ROMs so many times and I still didn't need to start Angry Birds all over from scratch!
That's another thing: custom ROMs. My Vibrant now looks like stock Gingerbread, even though the ROM is built off of Samsung's Froyo ROM. It was also heavily optimized, so it's quick, stable, and the stock Gingerbread theme works with the Super AMOLED (thanks to the black theme). If you didn't know any better, it feels like you're using the Nexus S!
Notifications could still be better(I still like how WebOS does it), but it's definitely better than how Apple handle their's.
My biggest pet peeve is that Android still isn't very good for in-car use. This is despite the Care Home app! I have a suction cup near my stick shift where my phone can hang out. From there, I find it hard to turn it on (thanks to the power button on the side, instead of an easy-to-hit Home button like on the iPhone).
Android is also not very good with voice recognition. I have a hard time dialing by voice, since it doesn't seem to recognize what I'm saying. It could be a hardware design, and not the fault of the Android OS. The iPhone doesn't have this problem, even in a noisey environment like a car. If Anroid doesn't understand you, it would require you to look at the screen. On the iPhone, it would actually talk to you and tell you what's going on, so you don't have to look at the screen.
That said, even if I had to look on the screen for something (not browsing the web or email, mind you, but to switch tracks and podcasts), I can't! There's no zooming on the Android! On the iPhone, you can turn on zooming in the Accessibility settings, then use three-finger tapping to zoom in or out. I can then check the battery status, see what I'm listening to, etc.
Summary of Android Likes: Easily rooted, easy to back up and restore app/data, custom ROMs
Summary of Android Dislikes: Notifications could be better, not very good for car use, harder to turn on (when mounted in car), not good with voice recognition, voice recognition requires you to look at the screen, no zooming
I really can't put my finger on it, but the iOS just seem more polished. There are more high quality apps, and they all seem to have some consistency. And lets not forget about the games.
There is also something to be said about a tight knit bond with hardware and software, and that is the home button. Normally I wouldn't mention hardware designs I like on a software vs software discussion, but I can't help myself here. After all, the home button helps make one of my pet peeves about most Android phones go away: in-car operation. It just seems easier for me to hit the home button than the power button to turn on the phone, then swipe to unlock. With most Android phones going towards capacitive (touch sensitive) buttons, I'm starting to appreciate the physical home button of the iPhone more and more. This also means what little Android phones that have physical buttons (like the MyTouch 4G) gets much respect from me.
Speaking of which, the voice recognition for dialing is much better than how Android deals with it. It simply handle names better, it seems. Sure, it makes the occasional mistake, but you'd know about it before it calls without looking at the screen. This is because the iOS gives you audio feedback so you don't have to look at the screen to see if it is dialing the right person. Android would just beep at you, and you would have to concentrate on the screen for a possible match on a list.
Adding to the in-car use theme, you can enable zooming with three-finger taps in the Accessibility settings. This way, I can check the battery status or the name of the current song or podcast that is playing at a glance.
Everything I liked about the Android and it's what I dislike about the iOS. There is no easy way to back up your apps and data without using iTunes. Even then, it's dicey. After all, if you jailbreak, you'd want to avoid iTunes as much as possible. And since I jailbreak, there is no easy upgrade for me. Upgrades require jailbreakers to clear out their phone. I am now afraid to play any games on my iPhone because I know one day I will lose my saved games.
Also, iTunes is a pig on Windows, and most of us use Windows. Even if you don't, having to rely on desktop software to sync seem so 90s (thinking back to the Palm Pilot). iDevices are getting to be very computer-like, so why can't we just do everything iTunes related on the device itself? We can already purchase music, videos, and apps on the device. Why can't Apple keep track of what we own, so that when we buy a new phone, we can just download everything back? Same with the data associated with the apps, like saved games?
And of course, you have to jailbreak the iOS for all the cool stuff. That wouldn't be a big deal, except that Apple seem to be actively blocking the jailbreakers. It seem that the team that jailbreaks iOS is a very small group of people (with few "stars" like comex, GeoHot, and MuscleNerd), where as it seem the Android rooting community is larger, and there just isn't one person who is working on rooting all the phones. This also means it takes longer for a jailbreak when a new version of iOS comes out. In fact, the untethered jailbreak for 4.2.1 didn't get released until after 4.3 beta came out. And how much longer until a jailbreak for 4.3 is released when that version goes gold? It's a cat and mouse game, and the cat always seem to be behind. Heck, I'm still on iOS 4.1 because the jailbreak for 4.2.1 requires you to update the baseband, which also means you would lose your carrier unlock. I guess this won't be a problem for Verizon iPhone owners.
Of course, there is the notification system. We know the story. Notifications only comes as badges on the app's icon, and messages that pop up and interrupt you. Also stacks of notifications require you to go through them one after the other without an easy way to put them aside to deal with later.
Summary of iOS Likes: Polished, high quality apps, games, physical home button, easy in-car operation, good voice recognition, audio feedback, zooming
Summary of iOS Dislikes: No reliable app/data backup, iTunes, jailbreaking (cat and mouse game), notification system
It seems like everything I hate about one mobile OS, I like in the other. If only we can combine the best of both worlds. The iOS comes the closest to ideal for me. It just needs to be a little more liberated like Android - being able to sync to the cloud, get access to the file system, easy to "root" for tech-savvy users. I know they are afraid that jailbroken phones may ruin the experience, but come on, Apple. It's not like I'd let my grandmother jailbreak.
These are the two most influential mobile OSes. Windows Phone 7 is still in it's infancy, and I haven't had real world use with it. And I still love the WebOS, but I bet it wouldn't work all that great in my car. There's something about having a physical home button that is in front. Or maybe hardware designer needs to put their wake/sleep button where the iPhone's home button is at.