Google is doing a fantastic job with Android, it's just that the carriers and OEMs are dragging their feet at properly supplying their handsets with updates. To make matters worse they continue to fiddle with the Android system (see HTC's Sense UI) for no apparent benefit to the consumer other than to make their phone 'stand out'.
I'm currently very angry with HTC and T-Mobile for their last century attitude to mobile devices. It's ridiculous that they have promised to upgrade my Hero to 2.1 since March and still nothing - also the last firmware update also conveniently disabled all possibility to root the phone. Say what you want about the iPhone, it is at least supplied with updates for a reasonable amount of time (~3 years?) and older models don't get their update months late.