My actual phone (I have an iTouch, as opposed to an iPhone) is an HTC Hero, which runs on Android, and I agree somewhat with your sentiments. Not only are the specs of each individual phone different, the body of the phone itself is different. For example, the HTC dream has a slide out keyboard, whereas my Dream is touch screen only.

As far as phone sales, I'm sure android will be able tom leave a significant dent in the iPhone sales, but their software selection will always be far outweighed.