If you're talking OS centric, I think Windows Phone 7 is better, mainly due to the notifications system. If you get a push or a toast notification, it won't lock the phone up on you like it does on the iOS platform. However, once the notification leaves the screen, there is NO way to get it back, there is no way to keep them in a log.
However, on the iOS, you can get Boxcar, which is superior in this regard as far as keeping some of them.
I love the Live Tiles in WP7. So far more superior to the iOS that I can't even begin to describe it.
Now as far as managing apps and stuff, the iOS has it all over WP7. Getting apps is a pain on WP7. If you get an app from your phone, you can't redownload it from Zune. If you get all your apps from the phone and you have to reset your phone, not one of the apps will get downloaded and reinstalled automatically; however, if you get all your apps from Zune, this will happen. It's such a pain in the *** and simply ********.
The hardware is nowhere in comparison. The iPhone 4 is superior to any WP7 handset I've seen. The apps are superior, too. But overall, I think WP7 looks better, is easier to use, has better notifications, the Live Tiles are pure shibby, better Office integration, better Facebook integration. The pluses outweight the negatives, but not my much.