http://blog.wired.com/business/2008/...years-and.html
This article pointed out google didn't make it a big deal that Android had two fairly big things that the iPhone doesn't: copy&paste and also true multitasking. However, I don't think Google is particularly aiming to challenge the iPhone, even though everyone wants to think that way (esp many articles online). That may be T-mobile's goal for the G1, but not Google. Google just wants more people to use the mobile web, having a phone that can beat or "kill" the iPhone is irrelavant to them because they are giving away the OS for free anyways and they don't get direct money from the phones. They just need the phones to be good enough so that Android can reach customers.
But on the issue of the iPhone, I don't get why they are holding such a hard stance on copy&paste. Is it security? I don't know. Seems like something that should be fairly easy to accomplish by Apple if they wanted it on the phone.