Android apps are written in a Java-like language. It runs on a virtual machine just like java, which does have a small performance hit as a result. However, it also means the rest of the system is protected from badly written applications that may otherwise crash the entire phone. You can also write apps for Android using the NDK which gives you lower level access to the phone that what is available via the Java APIs. The best thing about Android is that it's open souce and supports open development. It's also very easy to publish your app on the Market, even if it's a paid app. You can use any tools or compilers you like for Android, including compilers that integrate Flash into apps. One downside of Android is that you have to take multiple devices and multiple versions of the OS into account. Not all phones are the same - they have different sensors, some have keyboards, some don't, some have more memory, some don't, some have different resolutions and screen sizes.
With the iPhone, you have a similar choice of ways to code stuff, with similar access to hardware through the APIs. For the most part, all iPhones are the same in terms of coding for them. There's not a lot of difference here overall. But this is where it ends. Apple do not support open source or open development in the way Google does. It is also a difficult and slow process to get your app published to the app store. You also HAVE to use their compilers. You cannot use 3rd party compilers (such as the one that allows you to compile Flash into apps). This is now expressly prohibited.
You can see more about that specific restriction on the iPhone here: http://daringfireball.net/2010/04/ip...flash_compiler
In terms of performance, it's hard to measure. The biggest difference is in the hardware. The Samsung Galaxy S, for example, has a graphics capability of around 90 million triangles per second, compared to the iPhone 3GS which can do only 28 million - so it would be way faster at graphics. However, the iPhone 3GS is much faster than older Android phones like the G1. Similarly, the iPhone 3GS has a raw processing power in excess of older Android phones, but Android phones with the 1GHz Snapdragon processors will be faster than the iPhone 3GS.

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