The iPhone 4 is a tremendous improvement over the previous phones from Apple. Battery life alone is enough to sell a brand new notebook, there's no reason the same shouldn't apply for a smartphone. Being able to deliver real world battery life use of between 5.5 and 10 hours on a single charge is quite impressive. And if you aren't using the phone nonstop? Expect even longer battery life.
On top of the battery life improvements Apple finally plays catch up and surpasses the technological advancements in its Android competitors. The 4's camera is as good as it gets today and the screen is a beauty. I don't believe this advantage will last for the lifetime of the iPhone 4. The phones that are in development today at least surpass the 4's specs in terms of raw CPU speed. Given that Apple's retina display is in high volume production already I'd expect other manufacturers to pick it up in due time.
And believe it or not, even if you upgrade to the iPhone 4 today in another 12 months it'll most likely be replaced by a dual core version that you'll want even more.

HTC EVO 4G (back) vs. iPhone 4 (front)
The main downside to the iPhone 4 is the obvious lapse in Apple's engineering judgment. The fact that Apple didn't have the foresight to coat the stainless steel antenna band with even a fraction of an ounce worth of non-conductive material either tells us that Apple doesn't care or that it simply doesn't test thoroughly enough. The latter is a message we've seen a few times before with OS X issues, the iPhone 4 simply reinforces it. At the bare minimum Apple should give away its bumper case with every iPhone 4 sold. The best scenario is for Apple to coat the antenna and replace all existing phones with a revised model.The ideal situation is very costly for Apple but it is the right thing to do. Plus it's not like Apple doesn't have the resources to take care of its customers.
As for the iPhone vs. Android debate, the 4 doesn't really change much. If you're not a fan of iOS 4 or Apple then the 4th generation iPhone isn't going to change your opinion. If you're an existing iPhone user you'll want to upgrade. It's worth it. The 4 simply makes the iPhone 3GS feel dated, which it is. It's a mild update to three year old phone vs. the significant redesign that is the iPhone 4. If you're married to Android, in the next 6 - 12 months we should see feature parity from the competition. And if you're a fan of Palm, let's just see what happens when the HP deal closes.

There's another category of users who are interested in the iPhone but simply put off by AT&T. While enabling HSUPA and the improved baseband make the iPhone 4 more attractive from a network standpoint, if you hate AT&T's coverage there's nothing Apple can do about it. I do get the feeling that the AT&T exclusivity will be over sooner rather than later. The iPhone and iOS are soon to be a mobile advertising platform, which means Apple needs as many users as possible. This is in direct contrast to the Mac strategy which purposefully didn't focus on volume to maintain high profit margins. Ultimately it means that AT&T either has to grow to be much larger than Verizon, or Apple has to embrace both carriers in order to fend off Android.