Android is the google OS, basically your phone will run with more functionality than the iPhone, more efficiently.
It's got an app store, they all have wifi and bluetooth, seamless google maps/gps/gmail/google contacts integration, facebook/twitter, etc. Pretty much every part of the phone has 3rd party software replacements, including the home-screen, keyboard, music player, etc. Browsing is ridiculously good, and your phone becomes the all-knowing overlord that does everything you need it to do. Google search anything from your phone anywhere, google maps anywhere to get to places, google google google google google google to google google google.
As opposed to, you know, lag with any other phone, including the iPhone 3G, or get apple'd with the iPhone 4.