I was impressed by the iPhone's camera, but that's only because I was coming from an HTC Mogul, which had a horrible 2MP camera.
That I can (mostly) do what I want with my N1 without relying on a jailbreak is what makes the N1 a win, overwhelmingly. That said, it is ironic and frustrating that your warranty is voided when you unlock your bootloader, a part of rooting a N1. It doesn't matter if there is dust under the screen, they see the "unlocked" icon and turn down warranty requests.
At least, they were- I'd love to hear that things have changed... Unless that changes I won't be rooting my N1, and I'm glad I didn't do that first thing- I just had to send my two week old N1 in for a swap to HTC because of dust under the screen. :/
Of course, your mileage may vary. :-)
1. the navigation app is better than what you can get on iPhone (use it almost every day) 2. Native Google Voice App 3. 5 megapixel camera phone (for me this was the threshold where I never carry a separate digital camera anymore, 5MP is enough for facebook) 4. I can use t-mobile instead of AT&T
Given the software isn't quite as good, these 4 features make it about a tie with the iPhone in my opinion. The fact Apple is irritating me lately makes the N1 a win.