The iPhone will continue to dominate and it's for 1 simple reason: uniformity. There is 1 form factor of iPhone (Basically, but the iP4 kinda changes the equation a bit.) How many different models of Android phones in different form factors exist? Besides "there's an app for that" there is also "an accessory for that". I can go to pretty much any store in the U.S. and get a case, charger, WTF-ever accessory for an iPhone. That was a very large reason I bought my 3GS. I can go buy a ~$150 adapter and plug it right into my stock Bose HU in my SS and even use the steering wheel controls.
And the perfect example: There was an Adult Swim Block Party in April at the LodgeBar downtown. They were passing out free cases for the iPhone 3G/3GS. There is no other single device in the world that it would make sense to do that with. Period.
Can I dock a Moto Droid in an Incredible docking station? Can I use the EVO 4G's HDMI docking station with Nexus One? Can I plug a Droid Eris into the Moto Droid's navigation windshield mount? The Android base is becoming more and more fragmented every day. Too many different device models, too many different screen sizes at different resolutions, too much difference. The only way Android will ever beat the iPhone would be if Google would take serious control of the reigns and Introduce a "Nexus Two" and say this is it, this is Android, period. But that will never happen.
I get the simplicity of the iOS, the knowledge that I can get an accessory for any possible application, and a (very) simple Jailbreak gives me all the customization that I crave.
Moar reading! http://www.engadget.com/2010/03/05/entelligence-will-android-fragmentation-destroy-the-platform/