Here are more thoughts on the Nexus-1 phone (from Google) and some of it's pros and cons in comparison to the Apple iPhone (and iPod touch). Both phones have advantages: the iPhone is clearly a smoother and more elegant user experience and has better ergonomics. The Nexus-1 is more unconstrained and thus lets developers, and hence users, to a larger variety of things with the phone and configure in more idiosyncratic ways.
Both phones use pretty impressive hardware to provide a range of impressive mobile computing abilities.
The fact that the Nexus-1 on uses the Android operating system means is, essentially, running UNIX (i.e Linux). The Apple iPhone is also UNIX based, although it is derived from a different lineage of the UNIX family tree. The iPhone, however, uses a layer of data security protocols to regular what programs can be executed, and also to limit what programs can do. Although it is possible to write programs that escape these safety protocols and limits, that it only for people who want to serious hack with their phone. The Android operating system, on the other hand, is a bit closer to a standard desktop-style UNIX release making it easier for users to install just about anything, and for programs to do whatever they please.
As a result, there are many programs for the Nexus-1 phone that fiddle with the way the phone operates. Some of these are useful, but by-and-large there is a huge clutter or applications that "tweak stuff," but many such programs are unreliable, incompatible with one another, or otherwise problematic.
The Apple iTunes store takes a lot of flak for being restrictive about what can be offered for sale. Among it's positives, it provides an level of assurance that all programs work more-or-less as advertised, and that they satisfy a minimum level of presentation quality, utility and consistency. On the other hand, Apple has been getting more and more controlling and autocratic, which is a very worrisome trend especially as they achieve market dominance in this arena.
While I found a few interesting applications on the Nexus-1 market (i.e. store) that I have kept on my phone, I had much more trouble finding good applications than I did on the iTunes store. The Android market is a bit like shopping at a very big pawn shop attached to a Walmart: lots of stuff, not very well organized, mainly low prices, a lack of quality good. This may improve as time passes, but the ability for people to stick almost anything on the store means a stream of shoddy hacks obscures whatever good content might be hiding there (for example these are many applications whose description says, roughly, just and experiment -- does not work properly). As a fan of UNIX, Linux and open-source development, I can't help but appreciate the virtues of this model, but for a standard consumer it seems to be seriously problematic.
Now, if you want to develop code and hack around, the Android and the N1 have a lot to offer. Getting shell access is not too hard, although getting root access does void the warranty. The android scripting environment (ASE) lets you run python, lua, and other interpreted languages and that's very pretty.