I have had the G1 for a bit, and really love it. I appreciate theopenness of the platform, and find developing apps, extremely easy (especially for the Java set).
I was at Google IO, so I am one of the lucky ones to get the Magic (or Ion, is another name they are calling it). It seems to be faster than the G1, and definitely has much more memory (300MB vs 100MB on the G1 - this is an extremely important stat, as applications can not be run from the SD card). The form factor is great. It is small, and comfortable in the hand (and on the face when talking on it). Battery life is definitely better on the Magic (it is a larger battery) - important as well, as both my Android devices have poor battery life. I personally require a real keyboard (meaning I still use my G1), but I find the soft keyboard on the Magic responsive (and as good as the one on the iPhone).
Cupcake (v1.5 - the new release of Android currently available of the G1, and the Magic) already has support for Video capture, and Bluetooth streaming, which as of now the iPhone doesn't support (but likely will with the 3.0 release).
iPhone certainly has more polish, and applications (but they had a head start), but I truly believe Android will catch up quick. I see a day soon, where all your Android devices will work together (someday you will have a tablet or netbook, a device hooked up to your TV, and your phone - that will all be able to share data and applications together).
One last stream of thought, which is especially pertinent for techie Java developers (which is obviously the audience of this group) - The model for developing apps is very well suited for Java developers. It is Eclipse based, and doesn't require Market access to load on the device (meaning you can develop custom apps easily, and load them on any Android device without requiring approval, or submission to a vendor marketplace). This makes Android a great platform for "Tinkerers", as you are able to really modify the device to do whatever you want.