Jobs is right about flash. Whenever a browser crashes on my Macbook, its because of flash.
Steve was surprisingly open here. I'm surprised. I can't wait to see what they have up their sleeve this year.
My favorite thing about the Droids is that users always claim they are either as good, or better than an iPhone, and can't name one thing it does better.
Since you asked. Things I think Nexus One (Android OS) does better than iPhone 3gs:
Gmail & Calendar (w/ gmail experience)
Contacts App
Google Voice (only web based on iphone)
Maps & Free turn turn navigation (even without pinch)
Multitasking
User customization
Build quality (w/ scratch resistant coating)
Seems faster even with multitasking
to name a few....
There are also many things the iPhone does better than N1. I've owned both phones and prefer the N1 right now. That could and probably will change wit the iPhone 4.0. Competition is a good thing for us end users.