I haven't used any of the new Android based devices (they weren't on the market yet), but I LOVE my iTouch. It has its weaknesses, such as no flash on web content, can't multitask, and the form factor, but I feel like Apple put out a device that works within those limitations. I use it primarily as a handheld computer that plays music and videos. I've all but given up on our Netbook.
Currently, I use my iPhone for email (private and corporate), light web browsing, Facebook, banking, Netflix, remote DVR management, MP3 listening (music and podcasts), movies (I rip my fav DVDs and convert them to mp4), ebook (PDF, Kindle, and Nook), and various other misc uses (Woot.com app, craigslist app, games, etc). There are more uses, but that's how I use mine.
It isn't a tablet, but it does most of what I'd use a tablet for. I may get a Nook Color to give me better edocument capabilities and some of the tablet functions.
Chris