I have been using HTC Dream since past few months. and i must admit that its damn awesome. It's touch screen response as well as the functionality of the OS is great. Its not hard to get root access if you are not a noob. however, i believe that it hasn't got much third party application support yet. I'am still missing PDF viewer, flash support, apps to SD card and others.
Most annoying problem with the Android OS is, you can not install apps to the SD card. phone's internal memory is about 74MB.which i believe is not more enough. there are some alternatives but they are not easy, you might brick your phone while performing such things without any proper knowledge.
The Possibilities are endless with android, as its an open source.