I'm not sure the whole battle is decided by DROID. Yeah, the DROID is a direct match-up against the iPhone, and it's unlikely Apple could or would start offering many varieties of iPhones. Meanwhile, there are going to be dozens of Android phones. This is why Apple can't really "win", no matter what they do.
But for the DROID to beat out Apple, well, some of that tech and some of that talk. I did this, twice... I was there at the tail end of the 8-bit computer wars. Apple and Commodore won... I was designing computers for Commodore. And over the next generation... I was a hardware engineer a number of the Amiga computers, which started out way ahead of the Macintosh, technologically, even if the first Amiga came a year later ... with real multitasking in 256K.
First thing to realize about Apple... they have won most of their business by [a] not being stupid, when pretty much everyone else has been, and really good marketing (which is part of [a], but distinct enough to mention separately). It hasn't always or even often been technology winning when Apple wins. The original Macs were just horrible designs, but they went their own way, and time proved it was the right concept.
The DROID is, at least this week, in the Amiga's position... better hardware (though not as dramatically so), but also a few other strong things. Android is the big one.. in that, we're not Commodore here, we're more like MS-DOS was back in 1983, when Apple was kind of the "serious" 8-bit world, and Commodore had just about conquered the games aspect. The IBM PC was originally an even worse chunk of hardware, but it had too big advantages: the math chip, which accelerated Lotus 1-2-3 to run 100x faster than VisiCalc on an Apple or Commodore, and well, anyone could eventually make one. That last one is the strength of Android... every cell phone company except Apple, RIM, and Nokia is working on Android.
So some of it will be advertising. Right now, the weird stuff might have been ok, but only a little of that. Commodore's first ads for the Amiga were weird, and not so effective, simply because no one understood them. I'm a bit worried the first two DROID ads are too similar. I do like the "Misfit toys" ad... that's setting it up in the consumer's mind that this is a competition against Apple, which, at this point, is a good meme to establish. After that, though, I think they'll need to show off just why DROID is better than iPhone. In simple terms... the techies already know the story (including the fear of running out of internal flash... iDon't have that issue).