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I think the gPhone won't compete with the iPhone. I'm sure it will be cool, but I have the feeling Google is thinking about giving them out for free to satisfy it's advertising market.
Here is a great site which aggregates all iPhone news (rumours at this point) into one place:
http://gphone.corank.com
Given google's propensity for photographing people in private moments, it'll be the ultimate upskirt device. I suspect x-ray googles will be their next invention.