I have an iPhone 3GS, and as of yesterday have a Nexus One (from Google for attending an Android Developer Conference! For free!). The screen is quite a lot better, with the pixel density making text outlines better and the slightly larger screen seeming to make a world of difference on the web. Their browser doesn't have a button bar, so it's that too.
That said, the user interface looks worse because they've used some cheap font instead of proper Helvetica and scrolling/zooming are quite clearly slower and much less fluid than even the original iPhone. The OS is confused as to whether it wants to be a bit like the iPhone, a bit like the BlackBerry or just to make up its own norms and the whole thing is just a bit clunky. Obvious example: the iPhone has one home screen in which rearranging and uninstalling apps are basically slightly different steps in the same process. The Nexus One has something that looks a bit like the iPhone screen but is actually like a computer desktop, with widgets and shortcuts to programs, but only if you actually put a shortcut there. It has a second screen, accessible from the home screen, that is more like the BlackBerry/Symbian program lists of old, giving a horizontal scrolling list. When you install a new program, it goes to that list but not to your desktop. To uninstall a program, you have to go to Settings, Programs, wait while it populates a list, then click the program you don't want, then click uninstall on the next screen.
Regardless of how much memory you shove in on Micro-SD (which can't be removed or inserted without removing the battery first), you can't install programs there. They can be installed only to the internal Flash, and as of switching the thing on straight out of the box there's only 178mb of that available. So I don't imagine things like Grand Theft Auto will be making the leap very soon.
Then, presumably for reasons of self promotion, GMail accounts use a separate app to Exchange accounts. So far they look quite similar (albeit with different colour schemes), but that doesn't really persuade me that it's a useful distinction.
That all said, the device is pleasingly thin, with much less of a bezel than the iPhone (thought hat may just be perception) and the subtle haptic feedback is nice. Plus the LED flash, making the camera much more useful.
In usability terms, Apple remain ahead. In terms of what I'd recommend to friends, Apple remain ahead. In terms of visual quality (including the actual fonts in use and the way things move), Apple remain ahead. From what I've seen so far, the Nexus One leaves Apple playing major catch-up only in dull, dry spec sheet terms.
Actually, I'll upgrade my previous comment. OLED is fantastic. It seems to have a wider gamut than LCD and the blacks are genuine deep blacks, even in a darkened room. You can actually see the improvement.
might address it other than to mimic the iPad solution.