HTC Desire -- most reviews say its better than the iPhone and im considering getting one soon as well -- but if you're leaning towards the iPhone wait for the new one to anounced later this month.
Rumour has it that Andriod 2.2 update for the Desire may be released as early as late this month. Android 2.2 boasts a speed increase of 2-5 times as well as Flash 10.1 support
There is an XT version as well as a Vodafone version dependin on what carrier your're with
Re touch screens I too was skeptical... but they are great
Re QWERTY smartphones with tiny buttons -- this is true however they are elevated making it easy to press them without mashing keys