Which is better? It depends on what you want from your smartphone.
Lifehacker does a run-down, summarized by this chart here.
The powerusers of Lifehacker prefer Android to iPhone 66% to 30%, but as the full article suggest, it's all highly subjective. If customization, navigation, and Google integration is a big thing for you, Android is the clear way to go. If music, gaming, etc. are important to you, then you need an iPhone.
I've always had iPhone envy, but I'm warming up to Android, so much so that I might just stay with it even if iPhones become available to Verizon. Apple's big problem (for me) is that they don't play nice with others. For example, Apple won't allow for display of Flash websites, simply because Apple doesn't like Adobe (the makers of Flash). I like my phone to do things and look the way I want it to do/look, and in that sense, I find iPhones limited. I also like how my Android phone can become, in effect, a modem for my laptop — whereever I am. But damn, I wish Android had better music and iTunes integration.