My girlfriend has an Android phone. Her reasons are threefold (in order of importance); 1) It's cheap. 2) It's relatively small (Wildfire S is smaller that the iPhone). 3) She uses only Google services (Gmail etc.) so it makes sense to use Android. She is what I believe to be a typical user and the fact that the OS is "open" is irrelevant to her. No-one else influenced her choice and I think this is true of the majority of the phone-buying public; the silent majority that actually matter (we "technically minded" [geeks and nerds!] really don't). Genuinely, the openness debate only has any relevance in places like this, and even then it's arguably not really relevant.
There are thousands of reasons to love or hate android. One thing i like is the development going on in Cyanogenmod and MIUI Android. It's relevant to me.
Those things wont help android 'win' against the iphone, but it will be relevant in other markets, like the MIUI phone, wasnt that around 200$?