Want to use your phone as a broadband modem for your computer? With Android 2.2 you can do it. With the iPhone you can't. In fact, even with Android 2.1 you can tether with an add-in, as I point out in Don't wait for Android 2.2 Froyo; you can data tether now.
It turns your phone into a WiFi hotspot
With Android 2.2, you'll be able to turn your phone into a WiFi hotspot, giving WiFi access to devices --- no USB cables required. You can't do that on an iPhone. To drive the point home, when Google did its Froyo presentation, it showed Android providing WiFi access to a WiFi iPad. Point --- Google.
It plays Flash
Android 2.2 will run Flash. As you've doubtless heard several hundred times by now, the iPhone won't run Flash, and Steve Jobs has vowed it never will. That means Android offers access to far more content than does the iPhone.
It has open apps
Want to download an app? On the iPhone you can only download apps that Apple wants to let you download. Apple has censored many apps, even banning Pulitzer prize winning cartoonist Mark Fiore, until extreme embarassment made Apple change its mind. On Android you can download any app you want, either through the Android Market, or from the Web.
Want to run multiple apps simultaneously on an Android phone? Sure. Go crazy. Want to do it on an iPhone? Sorry, you can't do it.
It has better browsers
Android's built-in browser is excellent, but if you don't like it, you can always use another one, such as Opera, and eventually Firefox, among others. On the iPhone, you've got only Safari and Opera.
It gives more carrier choice
Want an iPhone? Then you'll have to go with the much-maligned AT&T, which at times seems like communicating via tin cans and string. Want an Android phone? You've got a choice of multiple carriers.
Given all that, why would anyone buy an iPhone rather than an Android phone? I don't know; it beats me.
By the way, if you want a quick look at Froyo's capabilities, check out this YouTube video from phonescoop.