From strictly a hardware perspective, the Droid cannot beat the iPhone. (For those who don't yet know: the Droid is Motorola's 'savior phone,' which they hope will make them a prominent phone handset maker again). How can I be sure? Well, look at the below diagram:
Basically, it comes down to originality, memorability, and design.
Feature for feature, the Droid competes well with the iPhone. Google Android 2.0 is pretty cool, too. But look at the above marketing images: