More Android devices are sold than iPhones, yes. Add the iPod Touch to that and I'm pretty sure Apple still has a substantial lead (and possibly growing).
Also, how many of those Android devices are being sold with 1.6 and aren't able to upgrade the 2.x series due to manufacturer laziness or hardware limitations? Is it really fair to compare an Android 1.6 device sold today to an iOS device sold today? The iOS device will, based on history to date, be eligible for OS upgrades for at least two years. The Android 1.6 device is already two years out of date and not getting any younger.