iPhone:
+ More apps (those specific to companies, etc), as opposed to general-purpose apps.
+ Managing your music is a little easier (iTunes).
+ Phone is backed up for you automatically (iTunes).
+ Consistent user experience
+ Tends to bettery battery life (smaller screen = less juice sucked down)
+ More cases, accessories, car kits, etc available.
- Cannot change fundamental things like keyboard, etc.
- Cannot change battery or expand memory.
- Smaller screen.
- Requires iTunes installed on your PC to even activate the phone (Mac, Windows only - Linux users need not apply).
Thunderbolt:
+ FLASH, support for more video and audio formats.
+ Does not require iTunes on your PC.
+ much bigger screen.
- Heavier, larger phone.
- Battery life.
+ Can change to an extended battery to help with battery life.
+ Takes SD chips, lots more memory.
+ 4G-capable.
+ Voice and Data at the same time even on 3G (Tbolt is the ONLY Verizon phone capable of this on 3G, if you want an iPhone and need this get AT&T).
+ Can replace launcher, keyboard, browser, etc etc.
Which is a better phone? Well, which is prettier? Sunsets or kittens? (grin).
Seriously, there is no "better" in this - it's a matter of which one suits your needs, wants, and usage patterns best. I chose the Thunderbolt because:
1. I have large fingers and cannot type on the iPhone. With the Thunderbolt, I get a bigger keyboard AND the ability to use a keyboard that works exactly like my PalmPilot from years back (a feature that many of my iPhone-toting friend are very jealous of, since the iPhone won't let you change keyboards at all, much less to a handwriting-recognition one).
2. I use Linux as my desktop, so I have no way of activating an iPhone short of creating a Windows Virtual Machine in VirtualBox, and I'm not about to do all that for a @#$@#$ phone.
3. I wanted the 8Mpix camera, the iPhone 4 (the one out at the time when I made my choice) has a pathetc camera compared to the TBolt's. To be fair, the new 4S camera seems to perform better than my TBolt's does, so that factor has changed.