The Nexus One is a far better device. I've had on (the T-Mobile version) since March.
History: I bought mine at full price (without the plan they offer) because I had a plan with T-Mo and I was off contract already. They have a nice no-contract plan called Even More Plus. if you run the numbers of buying the phone at cost and using a no-contract plan versus getting a contract with some other smartphone (like the iPhone, which requires two years), you will come out ahead by buying the phone outright.
Second, the Nexus is an Android phone. This is an open system, is used on a wide variety of phones, with more appearing every day. There are over 50,000 apps available and more arriving daily. Not as many as the iPhone, but they have had a two year head start on Android. The Android community, being more open than the Apple development community with less restrictions, encourages sharing and freedom...Apple does not. Also, Android phones (especially the Nexus) are easier to root (jailbreak in iPhone terms) and modify, and in fact, it's almost encouraged. I rooted my Nexus three weeks after I got it and installed an excellend modified ROM that added a bunch of features. But the phone rocks without mods as well.
Third, the Android integration with Google's main apps (mail, contacts, calendar) is incredible. You can make changes on line and they instantly sync up on the phone. You never have to worry about losing mail, contacts or calendar entries, since your Google account is saved in the cloud. All of this is free and built in...no other apps required.
Fourth, the Nexus comes unlocked from Google, since it's not sold by a carrier directly. This means you can use other SIMs when you want. I recently spend two weeks in Ireland. I dropped an O2 sim into the Nexus and was able to call and text immediately. I didn't have a data plan on the foreign sim, but I found plenty of wi-fi in Ireland. There are two versions of the phone for the US, one for T-Mobile's 3G data and one for AT&T. i strongly recommend T-Moble, only because of their no-contract plans. They have great data coverage, too.
Fifth: you can change the battery yourself. Google sells spares for $25. You don't have to send your phone back to have the freaking battery replaced.
Sixth: here's a short feature list: 3G/HSDPA, wi-fi, bluetooth, 5MP camera, video, GPS, tethering-capable, unlocked, completely customizable interface, supports multiple music formats (including OGG and many mods add FLAC), tons of apps, voice-activated navigation with Google maps (free), choice of browsers, available car doc (a very cool tool), apps for corporate email accounts or pop3 accounts, voice dialing, rootable and mod-able...and it makes calls and texts, too! ;-)
The Nexus has a nice sound filter that can filter out ambient noises when you make a call, so your caller just hears you.
I can't compare to the iPhone other than what I have read. i don't see any advantage to that device, and I'm biased to the open system, so I would always pick the Nexus.
Hope I convinced you.