The Magic is very good in a lot of ways, but has a number of issues. Mine does, anyway, running Android 1.5. Keep in mind I haven't used any other Android phones to compare with (I'd love a Droid with its hardware keyboard).
For instance:
1. The Android mail app (separate from the gmail app) is very poor in many ways - google for it if interested. The gmail app is pretty good but has its own issues, in particular that it (and the phone in general) cannot handle multiple email accounts.
2. Battery life is not, in my experience, 2 days under heavy use. If you're running wifi and/or 3G (even lightly), a bit of GPS, and even low call airtime, I'd bank on charging every night. Heavy network and GPS use and you may only just make it through the day.
3. I've found it slows considerably over time, most annoyingly in the keyboard recognition. My guess is that this is due to multiple running processes/apps and even possibly a poor user dictionary implementation. I just reset mine to the factory image (ie, wiped it) and it's back to pretty snappy performance (but still slightly laggy).
4. I got an Android phone because I'm a developer and wanted to try developing for it, and I like open platforms, and because they're much smaller than the iPhone. I didn't want an iPhone and still don't. However the iPhone 3GS seems far more performant and a generally more pleasant experience (as long as you don't have a problem with an Apple re-education). Just a thought.
5. If you have big hands, the larger screen and therefore keyboard on the iPhone is a bit easier to use.
6. The Bluetooth implementation is broken.
Cheers
Steve