Well, it definitely looks like an improvement over earlier iterations, but I still feel Android looks too Linux-like and therefore too geeky for many users. Don't get me wrong, I use Linux a lot and I think it is a very capable operating system, but I mainly use it as a server operating system and I still do not like Gnome/Kde/Compiz environments which often require hacking to get things working, and it looks too geeky for my taste. I still think Apple produces the best GUI (design, user experience and underlying API's) on a *nix environment, nothing can beat them on that front. Same goes for the iPhone vs the Android GUI.
Another thing is that Apple's App Store is better that the Android Marketplace, from a commercial perspective. Several newsreports mention Apple's App Store as a marketplace to make profit, while in contrast the Android marketplace does not seem as profitable for commercial developers. In order to boost interest for commercial parties the Android Martketplace should be redesigned to make it commercially interesting, if Google wants to gain marketshare.
One thing I really like about Android and that is the openness of the platform. I would really like to be able to do everything with my phone and be in control. As the iPhone is closed this is limiting me in my freedom to do so. I like the sandboxed approach for running application of the iPhone, even though this has it's limitations. Even though I like the openness of the Android platform I'm not sure if a viable app-store would be possible in an 'open world'...
So overal, I think the iPhone is still going strong while Android could have potential in the future, but it is not good enough yet. The main issues Google has to tackle is to improve user experience, make sure the Android marketplace is a profitable environment for commercial parties, and innovate...
