I personally don't think it's better than an iPhone, but I don't know if it needs to be. It's the first viable alternative out there. It's good for the market, which is in turn good for everyone else. I hope they don't rely on the whole "iDont" thing too much in the future, since Apple can make all those claims obsolete if they feel like it.
The iPhone is very well done, without lag from what I can tell. I suppose that's easier to do though when you make the hardware and software in the same place.
For now, I say the iPhone is still the best phone out there, but only because of the stuttering issues that Android phones seem to have. In a year or so, phone hardware will catch up with the Android platform and will run smooth as silk.