I have been testing the G1 extensively, in multiple cities and in multiple scenarios. In general, I like it and consider it a worthy competitor to the iPhone. Both devices run on fast 3G phone networks and include Wi-Fi. Both have smart-touch interfaces and robust Web browsers. Both have the ability to easily download third-party apps, or programs.

But the two devices have different strengths and weaknesses, and are likely to attract different types of users.

If you’ve been lusting after the iPhone’s functionality, but didn’t like its virtual keyboard or its user interface or its U.S. carrier, AT&T, the G1 may be just the ticket for you. But it does have some significant downsides.

By far, the G1′s biggest differentiator is that it has a physical keyboard, which is revealed by sliding open the screen. The keyboard proved only fair in my tests, with keys that are too flat and that can be hard to see in bright light, and with a bulge in the body on the right side that you have to reach over to type. But, for the many people who can’t stomach typing on glass, the G1 keyboard will be a welcome sight. It’s complemented by a BlackBerry-like trackball for navigation.

The G1 has a smart-touch screen like its iPhone rival, for Web browsing and downloading programs. But it has a physical keyboard for conventional typing.

The G1 has a removable battery and uses removable, expandable memory cards. And it’s even a bit cheaper than its Apple (AAPL) rival: $179 versus $199. Its data plan also costs less — $25 a month versus $30 — and includes 400 free text messages, which cost extra on the iPhone. There’s also a $35 plan that includes unlimited text messages. And both plans include free use of T-Mobile’s Wi-Fi hotspots.

The G1 has a slick, clever touch interface to go along with its keyboard, and it includes a powerful new operating system. The operating system, called Android, was built by Google (GOOG). It is slated to appear on other phones over time, though it likely will look different on other devices because it is fully open to modification by other companies.

On the G1, the touch interface is fast and smooth. Programs appear when you drag up a tab at the bottom of the screen, and notifications of new messages can be read by simply dragging down the top bar of the screen.

You get much more flexibility in organizing your desktop than on the iPhone. In addition to placing icons for programs there, you can add individual contacts, music playlists, folders, Web pages and more. You just press on the screen for a longer-than-usual time, and a list of items you can add appears. It also has a higher-resolution camera than the iPhone, but like the Apple phone, it can’t shoot video.

It’s also much easier to place a phone call on the G1 than on the iPhone. You can just start typing a contact name or phone number while on the home screen, sparing you the need to enter the phone or contacts program. And there’s a virtual phone keypad that allows you to avoid opening the physical keyboard just to dial a number. It’s also much easier to jump to the top and bottom of long lists.

The G1′s Web browser, built on the same technology as the iPhone’s, worked well at rendering scores of common sites in my tests. You can either pan around pages with your finger, or choose to view the whole page at once and zero-in on a section by moving a small rectangle around.

This first Android phone, which was largely designed by Google and built by Taiwan-based HTC, also includes some key features Apple omitted. These include a limited ability to copy and paste text, and the ability to send photos directly to other phones without relying on email, a common phone feature called MMS, or Multimedia Messaging Service. And, unlike AT&T (T), T-Mobile (DT) will even allow users to legally unlock the phone after 90 days and start using it on another carrier, provided you pay a hefty early-termination fee.

In my battery tests, the G1 lasted through the day, but I had to charge it every night. That’s better than the initial battery life on the current iPhone, though in fairness, Apple has improved the iPhone’s battery life through software updates, and I found them to be about the same for mixed use.

In my talk-time test, the G1 got just under its claimed five hours, about 19 minutes better than the iPhone.

There are two email programs: one for Google’s Gmail, another for all other email services. There’s an instant-messaging program that works with multiple services. There’s one program for accessing Google’s YouTube service and another for Google Maps. The G1′s Google Maps program even has a feature, coming soon as well to the iPhone, that offers photographic street views of certain locations. But the G1, unlike the iPhone, includes a compass that orients the street views as you walk.

The built-in download store for third-party programs, called Market, worked well in my tests. I was able to quickly download games, productivity programs, and other apps and, unlike Apple, Google says it isn’t blocking any programs.

However, the G1 also has downsides. It’s a chunky brick of a device. While it’s a bit narrower than the iPhone and feels OK in the hand, it’s almost 20% heavier and nearly 30% thicker. It also has a smaller screen and doesn’t accept standard stereo headphones.

The G1 also skimps on memory. It comes with only 1 gigabyte of storage, just one-eighth of what the base iPhone offers. To increase the G1′s memory, you have to lay out more money to buy a larger memory card.

The G1 also limits third-party applications to a paltry 128 megabytes of memory. At one point in my tests, after downloading a bunch of third-party programs, and adding songs and videos, the G1 warned me it was running out of room, a warning I have never seen on my heavily used iPhone.

Another downside for some users: The G1 is tightly tied to Google’s online services. While you can use non-Google email and IM services, the only way you can get contacts and calendar items into the phone is to synchronize with Google’s online calendar and contacts services. In fact, you can’t even use the G1 without a Google user ID and password.

The G1 doesn’t allow the use of Microsoft’s Exchange service for email, contacts or calendar items, or any other company’s over-the-air synchronization for contacts and appointments.

In my tests, synchronizing with Gmail, and with Google’s contacts and calendar applications, was smooth and fast. So, the G1 may be great for dedicated Google users, but not so good for folks who rely on competing calendar and contacts services from, say, Yahoo (YHOO) or Microsoft (MSFT). Future Android phones may not be so tightly tied to Google services, but the G1 is.

It also can’t synchronize any data at all directly with a PC or Mac. For instance, it can’t sync with Microsoft Outlook or Windows Media Player on a PC, with Apple’s iCal or Address Book programs on a Mac, or with iTunes on either Windows or the Mac. It has no PC-based synchronization software of its own, and it offers no way to automatically back up your settings, music, applications, videos or photos, either to a computer or to an online repository, though Google says it plans to add a backup feature.

To get Outlook or iCal data onto the G1, you must install add-on software. To get your songs, videos and photos onto the G1, you must plug the phone, or its memory card, into your computer and manually move the files over.

Overall, I found the G1′s user interface inferior to the iPhone’s. It lacks the iPhone’s ability to flick between multiple pictures and Web pages, or to zoom in and zoom out of a photo or Web page by simply using two fingers to “pinch” or expand the image. It also doesn’t automatically change the orientation of the screen from portrait to landscape simply by turning the phone.

Further, many common controls that are easily visible on the iPhone can be accessed on the G1 only by pressing a menu button or by using keyboard shortcuts you have to memorize. Examples are stopping the loading of a Web page or moving forward to the next Web page.

There’s also no on-screen keyboard even for quick tasks, such as typing Web addresses, so you’re constantly having to turn the phone and open the physical keyboard, which quickly becomes a pain.

The G1 also is a greatly inferior multimedia device when compared with the iPhone. Its music player, while adequate, isn’t as nice as the built-in iPod on the iPhone. And it lacks a video player altogether, though a rudimentary one can be downloaded from the Market. The G1 does come with a program for buying songs from Amazon (AMZN), which worked well in my tests.

And then there’s the network. Despite all the troubles AT&T has experienced with its fast 3G network, which is still being built out, that company has 3G service for the iPhone and other devices in 320 U.S. metro areas. By contrast, T-Mobile offers 3G in just 20 U.S. metro areas. Eight more cities are due to come online by year end, which will still leave T-Mobile’s 3G coverage far behind that of AT&T and Verizon (VZ), which will soon introduce its own iPhone competitor, the BlackBerry Storm.

I did 40 speed tests comparing the G1 and the iPhone to see how fast they could download a Web page over 3G. The tests, conducted in Scottsdale, Ariz., and Washington, D.C., showed the iPhone to be consistently faster, by an average of between 50 and 100 kilobytes per second, even though T-Mobile’s network was carrying much less traffic than AT&T’s.

Overall, the G1 is a very good first effort, and a godsend for people who prefer physical keyboards or T-Mobile but want to be part of the new world of powerful pocket computers.

Find all of Walt Mossberg’s columns and videos online, free, at the All Things Digital Web site, walt.allthingsd.com. Email him at mossberg@wsj.com.