So which is better and why?
It entirely depends on what you what you want (or need) the phone to do.
What can the DHD do that the Iphone4 can't?
Well, not much. There are some basic functional goodies like widgets, better synching with Google Calendar (and the Google cloud in general) and the full internet experience with flash - in practice this makes virtually no difference when simply browsing.
There is the killer feature (for me, anyway) which is the ability to send and receive files via bluetooth.
You'll notice that so far only one person posting has offered any other concrete examples of where the DHD is better aside from customization:
Camera Better
Video Better
And in the case of video quality this is well known
not to be the case. The iPhone4 video capture is much better. In the case of stills photography the DHD can, with the right conditions and set up, produce excellent results BUT for point-and-click photos the iPhone4 will produce consistently better results.
Ergo if multimedia capture is important to you (especially video) the DHD may not be the phone for you.
You forgot to ask the important corollary question: "What can the iPhone 4 do that the DHD can't?" This is just as important a question, right?
The iPhone4 offers the ability to seamlessly synch with a Mac. This may be of no consequence to you. In that case you can ignore this aspect.
The major issue is with apps (especially games).
Even Google make better apps for iOS than they do for Android.
And it goes without saying that if you want to play a wide variety of quality games on your phone - Android is
not for you, period.
Fanboys on both sides have a hard time dealing with the fact that both of these phones are awesome. I hate to generalize in the following way but this may help you make up your mind: if you are a casual, non-tech minded phone user then maybe,
maybe an iPhone4 is the answer. If you like tinkering about with tech stuff and don't mind (or enjoy) getting stuck into customization and even rooting (in order to get the best out of your device) then maybe,
maybe Android is for you.
Oh and one final thing - if you have no investment whatsoever in the Google Cloud (gmail, calendar, docs etc) then Android loses its
raison d'