[long, but I suspect you crave details]
Although I have had an iPhone since Feb 2008, I grabbed a myTouch last month. That move came as a direct result of Apple's rejection of Google Voice, which works flawlessly on the MyTouch. As a business woman with multiple lines, I can't begin to tell you how much easier that has made things for me. BUT, turns out: a few unexpected pleasant surprises really opened my eyes in terms of the limitations of the iPhone.
First, keep in mind that the thing you're buying is supposed to be a phone, which means you'll want to hear the ringer. I can hear the MyTouch no matter how far away from the thing I may be in the house. With the iPhone, I have to be in the same room. Yes, I tried conjuring my own ringers, but the problem lies in the way the iPhone speaker is situated. Read: it's gonna yield a comparatively soft ring no matter what you do.
Second, I had forgotten what GPS can truly mean in a phone. The iPhone does not permit background apps, while virtually all other phones do. Examples: 1) With the MyTouch, I was able to get a free task app, which actually talks to me ("you have things to do") when I am physically approaching a task-related location. Since only apps open in the background can do this, no way will this feature be available on the iPhone. It's kinda like GTD on steriods. 2) Profiles: turn the phone/sound/notifications on/off on a schedule. Again, that's a not-in-this-life deal with the iPhone; it can be done manually only. 3) I like to see my agenda when I turn on the phone. No way with iPhone; widgets galore satisfy that and other itches on the M/T.
Third, over the life of the contract, the cost of owning a MyTouch is significantly less than the iPhone. I was willing to accept the long-term premium iPhone cost, until the Google Voice fiasco, and signal woes (below), materialized, by which time I was well beyond the 3GS return period. (I'm now using an iPhone app, Notify Me, to keep me informed of any changes to the AT&T page re Terms and Conditions, which will be my get-out-of-jail-free card.)
Fourth, until mid-July, I got 5-bar signal strength on my iPhone in the house. One day, things changed to a continuous fight between "No Service" and a barely noticeable blip. No rhyme or reason-- it just happened. Same thing on my husband's Razr, so I knew it wasn't a phone-specific problem. AT&T gave me a substantial credit, but my iPhone love affair had dimmed. All those calls that had dropped-- which I had shrugged off in years gone by--, no matter where I may have been along the eastern seaboard, came flooding back to memory. By comparison, I've also had the MyTouch up and down the East Coast-- I've yet to get anything less than 3-4 bars, and no dropped calls.
Given the reliability and convenience factors, I'm now squarely in the Android camp. Admittedly, the iPhone offers a more fluid or smoother overall experience, but to me, it's merely a matter of style over function. I can browse comfortably with the M/T, although I had to get used to it-- the iPhone had really spoiled me in that regard via its pinch-to-zoom feature. But, once I got used to the Android version (tap the magnifying glass), it was fine.
Even beyond Google Voice, for me, this is the tipping point: I spent a few hundred bucks buying the iPhone. That makes it mine, something Apple fails to comprehend. Apple seems wedded to the idea that the iPhone is on loan, as they dictate what can and cannot be done with it, absent jailbreaking. Once that reality set in, I was no longer willing to accept the other snafus associated with the iPhone, and acted accordingly. Note: At some point, the FCC will cure this ill. In the meantime, my cure = the MyTouch.
Only you will know what satisfies you best. If you want the phone to play with it, the iPhone will undoubtedly satisfy... as will the M/T. But if you're looking for a TRUE phone that YOU own, with all that suggests, the M/T will likely prove a better fit.
Just one gal's opinion!