The N1 is going to be crappy, just like the original iPhone was crappy. If you want to support the Droid movement, buy the Nexus. If you are willing to wait a while for your phone not to suck, buy the Nexus. If you are blown away by speech to text, buy the Nexus.
If you want the best current smartphone (and AT&T works in your area), buy an iPhone.
We need to make a distinction here. Are you saying the N1's hardware will be crappy, software will be crappy, or the interaction between the two?
The Android software has been in the wild for more than a year now and it's pretty well developed, so it's not accurate to compare that to the original iPhone software. The N1 hardware appears to be top-notch so I think the word crappy applies even less to that than the software. So then I guess you are saying the N1 will suck for awhile until they work out problems with the interaction between the hardware and software. That's a fair criticism I guess, although I think unfounded.
I can tell you that this phone does not suck. My girlfriend works at Google so I've played with this phone since the beginning of December. It is most definitely the best smartphone on the market right now. I'd say if T-mobile has a decent presence in your area you'd be a fool to go with an iPhone over an N1.
1) The hardware is nothing without the software. Even a nice capacitive touchscreen needs the right programming. So, I don't think I really need to draw a distinction here. Also, I think everyone is using roughly equivalent, commodity hardware.
2) All Droids lacks the wealth of apps the iPhone has.
3) All Droids lack years of market testing like iPhones have.
4) If your girlfriend works at Google, you are certainly biased, and I think anyone who has touched all the major smartphones can't really say any of them are the best except the Blackberry or the iPhone, depending on the application. All Droids and Palms are just me-toos trying to catch up right now. I'm not saying Android and its phones won't get there, they just can't be there yet.
I'm mostly trying to point out that the N1 is not a new phone in the sense that the original iPhone was, and your entire first post indicates an overly simplistic view of the phone and its software. When Snow Leopard was released and started shipping on new Macbooks (with newer hardware) it would have been ridiculous to suggest that this "new computer" was "too new" and will suck for awhile thus we should wait a couple of iterations.
The Motorola Droid is pretty awesome. If you want to support the Android movement, that's just as good. Also, if you like pull-out keyboards with real buttons, then that's pretty nice.
If you want the best current smartphone (and AT&T works in your area), buy an iPhone.